From now until the end of 2018, there are potentially 29 new private residential developments which could be launched.
14,200 more new private homes to enter the market
This number has come from Sotheby’s review of recent government land sales (GLS) sites and collective sales acquired by developers between mid-2016 and August 2017. With these many potential launches, 14,200 new private homes are estimated to hit the market later this year.
Previously there might have been slight apprehension about a supply glut, but in view of the positive sentiments and rising home prices which have rallied in Q1, the market may well be able to absorb this new supply. Sotheby’s has however mentioned that this would be dependent on whether developers strategize their launches wisely.
14,200 may not be a small number to feed the buying public. But it is not impossible to digest as 15,400 new homes were launched following the 2008 sub-prime crisis. Last year, the number of unsold units fell almost by half from 35,000 to 18,900 by the end of last year.
Low-interest rates and liquidity will boost sales
Though most analysts are not expecting a sudden rush for these new private homes, and demand may still be capped by the existing cooling measures, they are hoping buying sentiments will remain upbeat. Demand will come from those who have sold their units in en bloc sales and low-interest rates may also push those waiting on the sidelines to make a move.
Looking at the land sites sold from 2016 to 2017, most are in the outside central region and rest of central region. There are however 10 sites in the core central region such as those near Orchard road. Competition is unavoidable but if strategized well, the market will gladly welcome the upcoming launches.