Mr Chia Ngiang Hong, President of the Real Estate Developers Association Singapore (Redas), spoke recently about the fact that Singapore developers are concerned about lacklustre new home sales despite the 1.5 per cent increase in private property prices in the second quarter of 2019. Speaking at the Redas Mid-Autumn Festival lunch, Mr Chia said that although prices have gone up, it “does not reflect the true state of the market”.
"New home sales remain lacklustre on the back of existing cooling measures, abundant unsold stock and worrying economy. The general take-up rate is also at a slower pace as compared to the total number of units available for sale," said Mr Chia.
Assuming the present rate of take-up continues, 2019 will see a total sales volume of about 8,000+ units for the whole of 2019. Based on this take-up rate and barring any unforeseen circumstances, we would require four to five years for the market to absorb the estimated 43,000 units available for sale."
Developers are concerned about the current market situation, where there is high supply and subdued demand. They are also cautious about the outlook of the Singapore real estate market given the challenging geo-political and economic environment and the heightened risks arising from the US-China trade tensions.
Ending his speech on a positive note, however, Mr Chia said that the property market does seem to be holding up fairly well. Singapore hotels are expected to turn in a healthy performance for the year. Real estate investment deals, occupancy for office space as well as rental also continue to remain relatively healthy. The retail scene, on the other hand, is expected to remain challenging in the near term.
Redas also welcomed the recent changes in manpower policy announced during the National Day Rally in view of Singapore's rapidly ageing population. The changes, such as the raised retirement and re-employment ages, will help to alleviate the manpower shortage, especially for engineers and technicians, faced by labour-intensive sectors such as the Built Environment (BE) sector due to tighter foreign manpower restrictions.