Singapore's unsold units dropped to 16,031

The 7-year low is on the back of higher resale activity.

According to a report from Jefferies Singapore Limited, unsold home inventory was at 16,031 units as of Q3. Total transactions in the first ten months of 2017 were 54% higher than those recorded over the same period in 2016. Quarterly resale volumes have reached 2012 levels, and we expect primary to catch up this year.

This is at historical lows since 2010.

Buyer sentiment has improved in recent months as was reflected in increased take-up at recent project launches and higher resale activity.

The report also notes that the rental market remains weak. Even though vacancy rates have declined from the peak of 8.9% in Q2 2016, they remain relatively elevated at 8.4% in Q3 2017 compared with 5.2% in Q1 2013 and the average of around 6.5% over the past decade.

Here's more from Jefferies:

As at Q3 2017, more than 30,000 private housing units were vacant. Rentals remained unchanged from the previous quarter in Q3 2017, after falling a cumulative 12.5% since Q3 2013. Interestingly, the rise in vacant units almost mirrors the fall in unsold inventory.

As of 3Q, 43,054 private residential units are in the supply pipeline. The redevelopment of en-bloc sites (coupled with supply from GLS sites) could potentially add another 20,000 new private housing units that are not yet approved.

These would more than double the number of unsold units currently in the pipeline within the next 1-2 years. We also note GLS supply is rising. For 1H 2018, potential housing units are at the same level as at 2H 2017.