Chart of the Day: This big chunk of private homes are likely to stay unsold

Is the government freaking out by supply scare?

It looks like a lot of homes will be displaying "For Sale" signs on their doors instead of the usual "Welcome" rugs as a big bulk of private homes on the Confirmed List for 2H14 is likely to remain unsold.

According to Barclays, private housing (including ECs) on the Confirmed List for 2H14 is down 15% h/h and 34% y/y to 3,915 units. 

The bulk of the supply is now made up by the Reserve List, which has also been scaled down and which is unlikely to be triggered for sale should market conditions continue to deteriorate.

Here's more from Barclays:

Including the Reserve List of 6,305 units, total private housing supply (including ECs) for 2H14 fell 12% h/h and -28% y/y to 10,220 units, and is now 29% below the peak in 1H11.

We see this as testament to the looming oversupply in 2015-2017 as the government reiterated the reduced future supply will be “added to the existing large pipeline supply of more than 90,000 private residential units (including ECs)”.

We reported recently that developer sales in the first four months of 2014 YTD had fallen by 63% y/y to 2,536 units from 6,892. 

We expect sales in May to pick up further on Commonwealth Towers (31% of total 845 units sold since 1 May) and Coco Palms.

Coco Palms, the last and arguably most attractive (as it is nearest to the MRT) development in Pasir Ris Grove, had reported robust sales of over 65% of total 944 units sold within the first week after sales began on 17 May, with units priced 10-15% below the previously expected cS$1,100psf.

We maintain our negative stance on the Singapore residential sector as we see an oversupply of private housing properties and expect prices to fall 20% by 2015E in view of an expected interest rate rise, coinciding with peak supply, and think the vacancy rate could reach a record 10% by 2016E.

Our key UWs are City Developments (CIT SP, UW, PT S$9.08) and Keppel Land (KPLD SP, UW, PT S$3.34).