Developers sold 32.5% more homes in 2017
By Cecilia Chow
/ EdgeProp Singapore |
Property developers launched 6,020 private housing units and sold 10,566 units for the whole of last year, which means developers’ sales outpaced launch figures, says Nicholas Mak, ZACD Group executive director. Developers sold 32.5% more private homes in 2017 compared to a year ago. Inventory of launched and unsold units has contracted by 52% to 3,407 in 4Q2017 compared to 7,237 units in 4Q2016.
With activity in the primary market impeded by fewer new launches last year, buyers of private homes turned to the resale market to widen their options. Collective sales were also included in the secondary resale volume. Some of the owners would need to buy replacement homes, hence, they contributed to the significant increase in resale transactions, adds Mak.
Some of the collective sale beneficiaries would need to buy replacement homes, hence, they contributed to the significant increase in resale transactions, according to Nicholas Mak (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The number of units sold in the secondary market for the whole of 2017 surged to a five-year high of 14,444 units, which is a good 36.7% higher than the 10,566 units sold in the primary market, says Ong Teck Hui, JLL national director of research & consultancy. The total transaction volume comprising both primary and secondary markets in 2017 was 25,010 units, a 52.7% surge from 2016, he adds.
The twin effect of lower new launches and returning buying interest has kept prices of private homes trending upwards. The overall private residential price index for 4Q 2017 rose by 0.8% q-o-q, after a 0.7% q-o-q growth in 3Q2017. The two consecutive quarters of positive growth is a clear indication that price recovery is “on a firm footing”, says JLL’s Ong, and a clear reversal of the downtrend which saw 15 consecutive quarters of price declines. Private residential property prices therefore, ended 2017 with an increase of 1.1% compared to a 3.1% decline in 2016.
Tricia Song, Colliers International head of research Singapore expects prices to recover 5% in 2018, in tandem with the rosier GDP growth. “The price recovery could also be supported by a more benign supply outlook over the next three years,” she says. Supply completions in 2017 was down 20.9% from the peak in 2016, and will taper off further over 2018-2021.
However, Song warns that the supply pipeline beyond 2021 could jump with the redevelopments from the current en bloc and collective sales activity. “We note the sharp increase in unsold inventory in the pipeline as URA included the potential supply from the recent Government Land Sales and en bloc sales into the count,” she adds.
There were 50,852 units of private homes in the pipeline (under construction or planned) as at 4Q2017, of which 66.2% or 33,714 units are still unsold. This compares with 43,054 units of private homes in the pipeline in 3Q2017, of which 55.9% or 24,063 units were still unsold. Buyers and developers should exercise prudence to prevent an overheated and oversupply situation in the longer term, cautions Song.
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