It will take over 12 years to clear Singapore’s massive private home backlog: analysts

There’s no hope even if take-up rates double.

Private residential homes in Singapore are simply not selling fast enough to clear off the large number of unsold inventory. With more projects slated for completion in coming quarters, analysts at Savills warn that it will take well over 12 years to clear the inventory of unsold units in projects which are currently under development.

“Adopting CCR’s average monthly sales for the period January to May 2015, and assuming that there will be no further Government Land Sales (GLS), it will take about 12 years to clear the inventory of unsold units in projects under development now,” Savills said.

The situation becomes even more dire away from the central region, Savills said. This is because the GLS programme is usually focused in the RCR and OCR.

“The time to clear the stock of present and future unsold units will be more than 12 years. Therefore, even if island-wide take-up rates double, it will take well over five years to sell down the inventory,” Savills noted.

Although demand is expected to pick up in the near future, it does not necessarily mean that normality has returned to the property market.

“The broad brush measures have merely made the smaller units more affordable to local buyers whereas larger units and those with a high price quantum, mainly those projects in the CCR, are not selling fast enough to clear off the unsold inventory. Lowering prices further would not be a panacea to increase demand because much of the unsold stock are larger units, which, because of the larger price quantum and the various cooling measures, are beyond the reach of many locals and permanent residents,” Savills said.