With around 15,000 unsold units, the undersupply in the private residential market at the end of the second quarter of 2017, had spurred a flurry of collective sales through en bloc, before cooling measures set in to regulate the property market. Looking at the current property market, a similar occurrence is not unimaginable.
For eight consecutive quarters since the start of 2019, the number of unsold private residential units has been steadily declining. The number of unsold inventory in the private property market stands at 21,602 units, as the first quarter of 2021 comes to a close. The unsold inventory in the private property market may fall to figures similar to that in Q2 2017, by the end of this year, or the first quarter of 2022.
Amidst the economic downturn, the lowered interest rates appear to have also motivated the purchase of properties, driving up prices further. With many homeowners looking to upgrade to private property, the high demand for private residential units has led to a depleting inventory. As developers seek to acquire more land for new projects, strong competition for land sales through the government land sales (GLS) and en bloc would also mean an invariable increase in prices.
The recent government land sales saw the private housing site in Ang Mo Kio Avenue 1 bidded at nearly $1118. The executive condominium housing site along Tengah Garden Walk also drew a record-high bid of $603.17 psf ppr. On top of record-high land prices, labour costs and construction costs are on the rise as well, in part due to the limitations on manpower. As such, the higher overall costs for new private launches could potentially translate to a further increase in private property prices.
While possible cooling measures may raise the barrier for property loans among others, and in turn, bring about a moderation in the sales volume of properties, they may not necessarily lead to a reduction in property prices. Hence, this is the most opportune time for you to enter the property market. Visit www.assetprogressionleader.com to find out more.