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Significant supply of private housing units in pipeline: URA

SINGAPORE — Two-fifths of private homes coming up here, or 17,178 units, have not been sold, but the market could be flooded with close to the same number of new units soon, largely from the en-bloc fever seizing the market in the past year or so, latest data released by the Urban Redevelopment Authority (URA) on Friday (Oct 27) shows.

Two-fifths of private homes coming up here, or 17,178 units, have not been sold, but the market could be flooded with close to the same number of new units soon, largely from the en-bloc fever seizing the market in the past year or so. TODAY file photo

Two-fifths of private homes coming up here, or 17,178 units, have not been sold, but the market could be flooded with close to the same number of new units soon, largely from the en-bloc fever seizing the market in the past year or so. TODAY file photo

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SINGAPORE — Two-fifths of private homes coming up here, or 17,178 units, have not been sold, but the market could be flooded with close to the same number of new units soon, largely from the en-bloc fever seizing the market in the past year or so, latest data released by the Urban Redevelopment Authority (URA) on Friday (Oct 27) shows.

Stopping short of an explicit caution, the URA said in its report on real estate statistics for the third quarter: “As en-bloc sales of existing sites have been very active over the past one to two years, the redevelopment of these en-bloc sites will add a significant number of housing units to the existing supply pipeline.”

The potential units from redevelopments of en-bloc sales (9,300) and available parcels on Government land sales (7,400) could number 16,700, slightly lower than the combined total of 17,178 units — 16,031 private and 1,147 executive condominium — that have gotten planning approval but not been sold yet.

The URA said “a large part” of this potential supply could be put up for sale in the next one to two years, which is when two-fifths of the units in the pipeline will be completed.

The vacancy rate of completed private residential units increased to 8.4 per cent, compared with 8.1 per cent in the previous quarter.

International Property Advisor chief executive Ku Swee Yong felt that there was an oversupply in the market, and this would continue to be a problem down the road. “If there is already oversupply, and we’re not able to bring in fresh demand, then it’s more sentiment, rather than real demand,” he said.

Demand will rise gradually, as homeowners reenter the market after making a windfall through an en bloc sale, said Mr Chris Koh, director of property consultancy Chris Koh International. Although elderly homeowners may opt for a resale public housing flat to save up, younger couples “comfortable living in a private home” would opt for another private property, he added.

He also noted the reduction of stamp duties that sellers pay on residential properties — since March, a homeowner would have to pay the Seller’s Stamp Duty (SSD) if he sells his property within three years of buying, down from four years before. The SSD rates were also lowered by four percentage points for each tier to between 4 and 12 per cent.

“That got people excited to buy again,” said Mr Koh. “With supply coming upstream, I don’t think prices will spike.

”In a recent survey of developers, builders and real estate consultancies, optimism about the property market climbed to its highest level in seven years, or just before the first of a series of policy measures was introduced to cool the market.

More are expecting a substantial increase in home prices in the next six months, the findings of the quarterly survey carried out by the Real Estate Developers’ Association of Singapore (Redas) and the National University of Singapore’s (NUS) Department of Real Estate show.

Since the start of the year, there has been a rush of developments gunning to go en bloc, with some even anticipating the year to record a 10-year high as developers look to beef up their land banks in anticipation of an upturn in the property market. So far this year, 19 deals worth S$6.76 billion have been closed — including S$906.7 million paid for Amber Park, the largest freehold collective sale by dollar value. ADDITIONAL REPORTING BY VALERIE KOH

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