Home prices to drop further as supply glut looms

Over 10,000 units are expected to enter the market in 2H.

Home prices will continue to slide down due to high incoming supply of 10,262 units in 2H16F and 14,578 units in 2017F, which will drag on occupancy rate, said CIMB.

The 3Q16 URA price index flash estimate showed that private home prices retraced by a steeper 1.5% qoq in 3Q16 versus the 0.4% decline in 2Q16.

In addition, the research firm said that the rental market remains sluggish, putting pressure on investment demand.

Monthly primary home sales, including ECs, for Sep 16 came in at 769 units.

Stripping out executive condo sales, transaction volume was 509 units, 8% higher mom and a 49% improvement from a year ago. Take-up rate was 1.06x new launch units due to lower number of new launches.

More popular projects were The Trlilinq, Lake Grande and The Glades. Suburban projects continued to garner the most interest, accounting for 58% of monthly sales, followed by city fringe projects (28%).