14-05-2013, 04:07 PM
By Leslie Shaffer
A flood of new homes is headed toward Singapore and it will carry with it a buyer’s market, analysts say.
Developers in Singapore are already offering discounts and freebies such as furniture vouchers and will probably give away more expensive “toys”–maybe even cars–as new properties begin hitting the market in force, says Chris Comer, CEO of Castlewood Group, developer of Nikki Beach properties in Asia.
Comer is a Singapore resident with global experience, including in Dubai, where he worked during the boom and bust of the past decade. He said the downturn could hit Singapore within the next 12 months, and “you’ll start to see properties resold for less than they paid for them” as investors try to cash out, he said.
“It’s going to be a renters’ market here for a very long time,” he said.
Not everyone sees a bubble bursting with such force, but other analysts are warning about the coming supply and declines in prices and rents.
Two weeks ago, Nomura estimated that more than 16,000 new private homes will be completed over the next three quarters, compared with 2,408 in the first quarter of this year and 9,853 all of last year. “Supply is likely to outstrip demand and vacancy (and rents) will likely come under more pressure in the coming quarters,” it said in a report.
Daiwa analyst David Lum also sees a glut coming. An estimated 86,000 private residential units were in the pipeline as of the end of last year–or 31% of existing private stock, he said in a report last month. That’s slightly higher than the most recent peak of 29% reached in 2008, but lower than the all-time high of 45% seen prior to the 1997 Asian financial crisis. Also coming is a wave of public housing due to hit the market in 2014-16, Lum said.
It all adds up to mass-market home prices falling 18% from the end of last year through end-2015, he said, and a 20% drop in the high-end segment.
http://blogs.wsj.com/moneybeat/2013/05/1...s-renters/
A flood of new homes is headed toward Singapore and it will carry with it a buyer’s market, analysts say.
Developers in Singapore are already offering discounts and freebies such as furniture vouchers and will probably give away more expensive “toys”–maybe even cars–as new properties begin hitting the market in force, says Chris Comer, CEO of Castlewood Group, developer of Nikki Beach properties in Asia.
Comer is a Singapore resident with global experience, including in Dubai, where he worked during the boom and bust of the past decade. He said the downturn could hit Singapore within the next 12 months, and “you’ll start to see properties resold for less than they paid for them” as investors try to cash out, he said.
“It’s going to be a renters’ market here for a very long time,” he said.
Not everyone sees a bubble bursting with such force, but other analysts are warning about the coming supply and declines in prices and rents.
Two weeks ago, Nomura estimated that more than 16,000 new private homes will be completed over the next three quarters, compared with 2,408 in the first quarter of this year and 9,853 all of last year. “Supply is likely to outstrip demand and vacancy (and rents) will likely come under more pressure in the coming quarters,” it said in a report.
Daiwa analyst David Lum also sees a glut coming. An estimated 86,000 private residential units were in the pipeline as of the end of last year–or 31% of existing private stock, he said in a report last month. That’s slightly higher than the most recent peak of 29% reached in 2008, but lower than the all-time high of 45% seen prior to the 1997 Asian financial crisis. Also coming is a wave of public housing due to hit the market in 2014-16, Lum said.
It all adds up to mass-market home prices falling 18% from the end of last year through end-2015, he said, and a 20% drop in the high-end segment.
http://blogs.wsj.com/moneybeat/2013/05/1...s-renters/