Home Buyers in Singapore are continuing to hold off on buying a home until it is seen if the prices will fall further before elections. New home units are being completed in Q1 2015 only to sit empty while the waiting continues.
The URA’s latest statistics have 308,814 private dwellings on the market Q4 of 2014. This is a rise of 2.1% over Q3 that only had 302,510.
Bellewoods EC in Woodlands
Out of that, 24,062 were vacant which 11.6% increase was over the previous quarter.
In a released statement from the URA, the total rate of vacancies (excluding Executive Condominiums (ECs)) was 7.8% in Q4, which was jumped from the 7.1 in Q3 for Bellewoods.
The media was quick to report on this, saying it was the highest vacancy rate since the 4th quarter of 2005 when it was at 8.4 during time of depressed rents.
Stock and Vacancies in private dwellings (Not ECs)
The Stock and vacancy rate as reported by the URA.
Qingjian Woodlands EC
Things may be getting worse as more thee are still many uncompleted homes coming down the pipe. Even with a decrease from 74,496 to 68,960 going from Quarter to Q4 that still leaves 26,742 unsold.
Using the planned completion date information there will be more than 20,000 private homes being finished in 2015 with an additional 20,000 units scheduled to be finished in 2016.
“”A looming supply glut is expected to further exacerbate rising vacancy rates,” said Alice Tan, Head of Research for Knight Frank Singapore.
Private residential units and he sees in the pipeline listed by expected year of completion.
Pipeline supply information provided by the URA for Bellewoods EC in Woodlands.
To prevent a glut of empty homes in the market, developers chose to focus on selling units from older developments last month instead of launching new projects, according to experts in the know Bellewoods.
However, only 230 units were sold in December. This is the lowest monthly sales volume in 5 years when developers only moved 108 units. In the year 2014, only 7316 units were sold, which is a significant drop from the 14,948 units sold in 2013.
“”With market sentiment for private homes largely tampered by the existing property cooling measures and the Total Debt Servicing Ratio (TDSR) framework, developers would need to moderate prices and rollout attractive product positioning in order to move units,”” according to Tan.
To further, exacerbate an already overbuilt market. The supply of completed private units is also putting pressure on an already weak leasing market, as revealed by JLL.
“”The rental index fell by 1%, In Quarter 4 for of 2014, and 3% for the whole year.”Rents in the CCR (Core Central Region) have declined 3.7% for the year 2014. This is more than the other segments as the higher rents makes the CCR less affordable to tenants who often have lower housing budgets,”” JLL added.
Night Frank’s Tan added some additional information that was more housing options available to Singaporean tenants, they are becoming cautious and looking for a better deal.”” This has, in turn, resulted in a rising leasing preference for city fringe locations rather than the city centre.””