Singapore Public Housing Apartments in Punggol District, Singapore. (Image by happycreator / Shutterstock.com)

Singapore’s private residential property surplus may take as long as four years to be cleared, according to the head of research for Singapore and Southeast Asia at global commercial real estate services firm Cushman & Wakefield Plc in a report by Bloomberg on Mon (9 Dec).
Speaking to Bloomberg, Christine Li added that private residential property sales have reached an average of 2,500 homes per quarter in 2019.
According to data from the Urban Redevelopment Authority (URA), Singapore has a surplus of 39,000 units as of last Tue, with approximately 34,000 of the unsold units comprising the Government’s land sales program and en-bloc sites. The remaining 5,000 are from sites still pending planning approval, as observed by The Straits Times.
The Monetary Authority of Singapore (MAS) the week prior had issued a warning that an oversupply of apartments may cause the value of such properties to depreciate, and that the local property market may face “potential downside risks” as a result of the unsold units.
“Ongoing uncertainties in the economic outlook and a softening labour market could negatively affect households’ incomes and their demand for property,” MAS wrote in its annual Financial Stability Review on 28 Nov.
Christine Sun, head of research at local real estate OrangeTee & Tie Pte, told Bloomberg that while private residential property sales may record a fall between 5 per cent and 10 per cent next year, prices of said properties could still increase a slower pace of 1 per cent to 3 per cent “assuming the economy doesn’t deteriorate excessively next year.”
Much of the surplus is observed in “outlying suburban areas versus areas closer to downtown, where easy access to top schools, shopping streets and the central business district are drawcards”, Bloomberg observed. 8,917 unsold units were recorded in prime districts, in comparison to 10,538 in suburban areas as of Q3 2019.
Developers have urged the government to lower its 20 per cent stamp duty for foreign buyers and to give them more time to sell their units before imposing levies.
Chia Ngiang Hong, the president of the Real Estate Developers’ Association of Singapore (Redas), told Bloomberg that the five-year deadline to build and sell all units at a site — from the time of purchase — should be extended to seven years, especially for projects of a massive scale comprising more than 1,000 apartments.
“Five years is too harsh,” he said.
A 25 per cent levy may be imposed by the Government on developers who fail to completely build and sell its units at a particular site in a bid to put a stop to “land hoarding”, according to Bloomberg.
Tay Huey Ying, head of research and consultancy at Jones Lang LaSalle Inc.’s Singapore office, however said that the Government’s cooling measures “to monitor the domestic residential property market closely for signs of over- or under-heating and calibrate the measures as appropriate to ensure a stable and sustainable market” are “prudent”.
Last Mon (2 Dec), Chia told attendees at Redas’ 60th anniversary dinner at The Ritz-Carlton, Millenia Singapore that the association hopes that the government “will continue to watch the pulse of the market, with the aim of maintaining a stable and sustainable market in line with economic fundamentals”.
Second Minister for National Development Desmond Lee said that while Singapore’s property “market is not overly exuberant” and is “growing at a more sustainable pace”, the Republic should nonetheless “also be clear-eyed on the global outlook, which remains uncertain”.
The uncertainties to keep an eye on include the United States-China trade conflict, Brexit, tensions between Japan and South Korea and the situation in Hong Kong, he said.
Lee also stressed that said uncertainties, however, may also potentially signal a positive outlook for Singapore’s property market, as the country’s reputation as a politically stable and safe nation could attract capital inflows into the local property market.
“At this point, the share of transactions by foreigners remains stable and low, accounting for 5 to 6 per cent of total transactions over the past three quarters,” he added.
“Today, the market is broadly stable, in part due to active measures that were implemented in July last year. Compared to the first half of last year, private housing prices appear to be moving more in line with economic fundamentals. We also observe that land bids over the past year have also been more cautious.
“These are signs that the market is not overly exuberant, but growing at a more sustainable pace. But we should also be clear-eyed on the global outlook, which remains uncertain.  The global economy is projected to stabilise at a modest pace of growth next year, amid uncertainties and downside risks arising from trade and geopolitical tensions. This could certainly weigh on the property market,” said Lee.
He also stressed that the Government does not intend to lift the cooling measures any time soon.
“We cannot take a hands-off approach to the property market, because our experience here and abroad has shown that left to itself, (the market) tends to go through large price swings, which harms genuine home buyers and home owners,” said Lee.
“Within the domestic market, we expect more supply of private housing units to come on stream. Developers should pace out the launches steadily, to match the demand from buyers,” he added.

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