Muted demand for private residential properties a concern for developers, says Redas president

Chia Ngiang Hong calls on developers to look beyond short-term volatility and to invest for long-term growth

Sat, Sep 14, 2019


PRICES of private residential properties may have gone up in the second quarter, but this does not reflect the true state of the market, said Chia Ngiang Hong, president of the Real Estate Developers Association Singapore (Redas) on Friday.

New home sales remain lacklustre on the back of existing cooling measures, abundant unsold stock and a worrying economy, he said in a speech at Redas' Mid-Autumn Festival celebration lunch.

The general take-up is also at a slower rate than the total number of units that have become available for sale, he noted.

In the first half of 2019, developers sold 4,188 private residential units, excluding executive condominiums.

At the present take-up rate, the total sales volume for this year would be about 8,000 units. Barring any unforeseen circumstances, it will take the market four to five years to absorb an estimated 43,000 units available for sale, he said.

The estimated number of available units was derived using data from the Urban Redevelopment Authority (URA). As at the end of Q2 2019, there was a total supply of about 54,000 uncompleted private residential units in the pipeline with planning approvals, including 35,500 unsold units.

Adding this number to a potential supply of 7,100 units from the Government Land Sales sites and successful en-bloc sale sites sold over the year that have not been granted planning approval yet, about 43,000 units will be available for sale in the near future.

Mr Chia said: "As developers, we are very concerned with the present challenging market situation of high supply and subdued demand. We have shared our concerns with the government. It has assured us that it is monitoring the market and will act appropriately at the right time, when the situation warrants."

In the second quarter of 2019, the Singapore economy grew marginally by 0.1 per cent year on year.

Noting that the global economy may be in for a prolonged period of economic stagnation, Mr Chia said: "Real estate developers will have to look beyond short-term volatility and uncertainty, and prioritise and invest for long-term growth."

In particular, developers must be ready to capitalise on opportunities presented by rapid urbanisation and technological needs in the Asean region and Asia, he said.

Minister for Manpower and Second Minister for Home Affairs Josephine Teo was the guest of honour at the event held at the Orchard Hotel. This year marks Redas' 60th anniversary.