Stock of unsold private property units have been falling. At 25 per cent lower this year as compared to 2013, the improving take up rates could be chalked up to pent-up demand from buyers and lowering property prices.
But the question remains, could sellers and investors expect a quick turnaround next year with profits and rental yields increasing? Resale property prices have dropped 6 to 11 per cent since 2013 and while sales volume has risen, the property rental market remains quiet. In fact, rents have softened this year and with the impending boom in supply of completed residential units next year (including executive condominiums or ECs and HDB flats), the rental market may be facing competition that’s tougher than before.
There are currently more than 300 unsold units the executive condominium (EC) market in projects such as Sol Acres, The Criterion and The Terrace. Developers of these and other private projects with unsold stock might be pressured to move these units next year as some may face restrictions such as the Qualifying Certificate penalties and the Additional Buerys’ Stamp Duty (ABSD). The latter not only affects developers, but also buyers who are also further restrained by the Total Debt Servicing Ratio (TDSR).
Photo: The Panorama
Prices of developer-sold new properties have already been on the decline this year. At The Panorama in Ang Mo Kio, prices fell fromr $1,343 psf to $1,226 psf within 10 months. Similarly in Sims Urban Oasis, prices have dropped $112 psf to $1,285 psf in 9 months.
2016 begins in less than a month, and everyone will be keeping a keen eye on the first quarter for the tone it sets for the year ahead.