The property cooling measures introduced in July have “weakened market sentiments and demand” by raising “the barriers to entry” for buyers, said Augustine Tan, president of the Real Estate Developers’ Association of Singapore (REDAS). He says that “all categories of buyers, from first-timers to investors and foreign buyers” are affected.
Augustine Tan, president of REDAS speaking at the annual REDAS Mid-Autumn Festival Lunch on Sept 19
Citing URA data, Tan says that in August, 616 private residential units were transacted, down 64.3% from the 1,724 units in July. He says that although private residential prices continued to rise for the fourth consecutive quarter – by 3.4% in 2Q2018 – this is not expected to continue in the second half of the year, as buyers are price-sensitive.
Tan was speaking at the REDAS Mid-Autumn Festival Lunch on September 19.
Quoting the analysts, Tan says as a result of the cooling measures, total private home sales for 2018 are expected to be between 8,500 and 9,000 units (excluding ECs) – a 15-20% fall from the 10,555 units sold in 2017.
On the other hand, an estimated 45,943 private residential units could be available for sale in the next two years. This comprises 26,943 unsold, uncompleted private residential units (excluding ECs) and potential supply of 19,000 units from GLS sites and awarded en bloc sale sites. “At this level, barring unforeseen circumstances, it will take around 5 years for these units to be fully absorbed,” he notes.
Desmond Lee, Minister for Social and Family Development and Second Minister for National Development, who was guest of honour at the REDAS event, said that the property cooling measures are necessary to ensure a “stable property market”.
Guest of honour, Desmond Lee, says that the property cooling measures are necessary to ensure a “stable property market”.
He reiterates that the rationale behind the cooling measures is “to simply keep prices in line with the economic fundamentals”. He adds, “As acknowledged by REDAS, a large supply of private residential units is coming onstream and interest rates are going up. And to avoid a severe correction later, which can have a more destabilising set of consequences, we decided to act earlier to maintain a stable and sustainable property market.”
Referring to the potential supply coming onstream, Elson Poo, senior vice president, Sales & Marketing, Residential, at Frasers Property Singapore, says: “19,000 is not an alarming number. The more crucial part is whether people can really afford it. For private housing specifically, if people can afford it, they will.”
Commenting on the cooling measures, Chng Chee Beow, executive director, Logan Property (Singapore), says: “Before the measures, the overhang units have been reducing, and it’s a sign which reflects a recovering property market.” He adds, “Buyers [now] have more choices, and it’s for sure that they will take their time.”
However, Chng’s advice to the property buyer is that “today’s market is a good opportunity to enter”. He adds: “If you wait for the market to recover, once the prices increase, it will be harder to enter.”
In his speech at the REDAS event, Lee also encourages corporates to contribute their part for low-income and vulnerable families, one of which is through the social service hubs the government will be setting up in rental housing precincts. There will be customised support and programmes to support families in rental housing, and corporates will “play a vital role in creating environments that promote economic growth, innovation and quality living for Singaporeans”.