RESIDENTIAL PROPERTY | Staff Reporter, Singapore

Distressed sales await mass-market homes as headwinds escalate

Bulk of new residential supply will be in the OCR.

Some homeowners who bought mass-market condominium units as investment properties might be pushed to distress sales this year, a developer warned in the latest Real Estate Sentiment Index (RESI) by the Real Estate Developers’ Association of Singapore (REDAS) and the National University of Singapore (NUS).

“Large numbers of completions expected in 2016 would put pressure on rents. Owners who bought homes for investment would be under distress to sell. This is especially for OCR where majority of the completions will take place," the respondent warned. 

Some 60.7% of survey respondents anticipate a moderate decrease in residential property prices in the next six months. Some 70.5% of the developers expect new launches to increase moderately and to hold at the same level in the next six months. 

“Weakness in the market will likely to cause developers to hold back on their launches and less aggressive on building their landbank,” another developer said.

Another respondent added that developers are not in a hurry to cut prices aggressively in order to gain more sales, unless there is an external review.

Indeed, 32.8% of developers expect prices to hold, which is up by 0.8% from the number reported in the last quarter.  

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