Potential Private Housing Supply Hits Three-Year High as Unsold Inventory Falls 7.2% to 14,929 Units

A Savills Research report released on Monday 24 August noted that three new projects were launched in the second quarter, selling more than half their units in the launch quarter. Two of these were located in the suburbs, and pent-up demand may be one reason the projects achieved strong sales performance.

The private residential projects launched in the second quarter were Tengah’s first private residential project Garden Residences, Vela Bay on the East Coast, and Hudson Place Residences, the second new project in the Media Circle area.

The report pointed out that although the number of newly launched units declined for a third consecutive quarter, new private home sales rose 6.4 per cent quarter on quarter to 2,141 units. Strong buying sentiment extended into the resale market, driving resale private home transactions up 17.9 per cent quarter on quarter to 4,007 units.

Savills Research suggests the increased activity in resale private home transactions may reflect relatively limited new project supply, with some buyers turning their attention to the secondary market.

The report noted that a wave of new projects will be launched over the next few quarters, covering all three sub-markets and giving buyers more choices.

New projects that may be launched in the second half include the mega project Thomson Reserve with 1,240 units, Lucerne Grand in the Jurong Lake District, and Amberwood at Holland and The Serra Residences in the core central region.

“Looking ahead, based on potential private housing supply, the private residential market will be more active in the second half,” the report said.

The report also mentioned that private home prices rose 1.4 per cent in the first half. Although the increase was below the midpoint of Savills Research’s full-year forecast range, the team still maintains its expectation of around 3 per cent price growth for the full year.

Alan Cheong, executive director of Savills Research and Consultancy, said confidence in the market outlook rests mainly on two points. First, developers have continued to acquire land at high prices over the past two years, reflecting the market’s optimistic view of the price trend. Second, although concerns about employment have increased, demand has shown no sign of a cliff-edge decline.

The macroeconomic situation is also favourable to the market. Singapore’s gross domestic product grew 5.9 per cent year on year in the second quarter, while the resident unemployment rate fell from 3.1 per cent in March to 3.0 per cent in June.