Going, going, gone: Unsold ultra posh private homes dropped nearly 50% to 9,900 units

Singaporeans getting a bit richer in last 4 years.

It would seem like the number of Singaporeans warming up to the idea of going home to luxury units are slowly ballooning, as the total inventory of unsold posh units fell down to 9,900 in 2013 from 19,300 in 2009. Thanks to the big fat 16.1% drop in prime luxury private home prices, both developers and buyers are sitting pretty amidst better sales for the former and better living for the latter.

According to Nomura, their estimates suggest unsold inventory in the high-end housing market has been pared down significantly over the past four years. 

Here's more from Nomura:

Using private residential projects located in the Core Central Region (CCR) as a proxy for the high-end segment, our survey suggests the total inventory of unsold units (projects completed since 2009 + projects uncompleted as of end-2013 + projects yet to be launched) fell from c.19,300 units at the end of 2009 to c.9,900 units by the end of 2013 (i.e. almost halved in four years).

We believe the average fall of 16.1% in prime luxury private home prices from its end-2007 peak may have helped to move the high-end inventory over the last four years.

That being said, in light of the more stringent regulation on property purchases and higher transaction costs such as the Additional Buyer’s Stamp Duty (ABSD), we think it could still take a while for the remaining inventory to be taken up. 

Moreover, our estimates also suggest about 12,000 non-landed private homes could be completed in the CCR between 2014 and 2016 – i.e. an average of about 4,000 units a year, vs. about 2,800 units completed in 2013. This could imply further competition for rental and/or secondary demand.