http://www.straitstimes.com/archive/...units-20140729

'Steady increase' in number of unsold private units

Published on Jul 29, 2014 1:08 AM


MANY private developments have been launched but remain unloved by buyers as home loan curbs continue to suppress demand.

The number of launched but unsold homes as at the end of June was higher than at the same time the previous year, according to official data last week.

There has been a "a steady increase in unsold units in launched private residential projects" since the middle of last year, when tough restrictions were imposed under a total debt servicing ratio (TDSR) framework, JLL Singapore research director Ong Teck Hui said.

TDSR forces home buyers to tighten their belts because it caps a borrower's monthly total debt repayments at 60 per cent of his gross monthly income.

Mr Ong noted that there were around 5,200 unsold units in launched private residential projects, as at the end of June last year. However, that jumped about 20 per cent to reach around 6,300 units, as at the end of last month, he said.

The Urban Redevelopment Authority does not give a breakdown of launched but unsold units by region.

However, the three projects with the highest number of such units were all in the suburbs, The Straits Times found.

The project with the biggest number of unsold private homes, as at June 30, was The Santorini in Tampines Street 86.

The 99-year leasehold project has launched all 597 units, but has moved only 113, leaving 484 units, or 81 per cent, unsold.

Sales were poor even though its developer, MCC Land, had engaged four real estate agencies to market the project when it was launched in March, a move deemed unusual at the time.

Consultants said prices are still holding buyers back, which is prompting developers like MCC Land to change how they market new launches.

In the past, developers would typically engage only one marketing agency, or two for projects with more than 800 units, but roping in more than two is now par for the course.

The launch of City Gate at Beach Road this month involved six agencies: ERA, PropNex, Knight Frank, Savills, Teakhwa Real Estate and SLP Scotia.

Consultants said that apart from enlisting more agents, developers could try to spend a longer period drumming up interest before the actual launch.

"Developers are likely to adjust the length of their marketing programme," said Mr Joseph Tan, executive director of residential at CBRE.

Developers have also lowered their selling prices below initial market expectations at recent launches, such as City Gate's.

The second-biggest number of launched but unsold units was found at Kingsford - Hillview Peak, in Bukit Batok. The 512-unit project by Chinese developer Kingsford Development has 352 unsold units, or 69 per cent of the total.

In third place was the 420-unit The Skywoods at Dairy Farm Heights by TA Corporation, with 319 launched but unsold units as at end-June.

MELISSA TAN