Private housing prices are projected to stay high in 2023 due to robust housing demand, high land costs, and high construction expenses.
It is estimated that the stock of unsold private housing units decreased from Q2 2020 to Q3 2022, or a total of two years and three months, to reach 5,320 units.
During the property market bull run from 2004 to 2008, when developers sold numerous private dwelling units, the present level is the lowest since Q3 2007, when the unsold stock reached 4,666 units.
It has been seen that the most recent peak in the supply of unsold private housing stock occurred in Q2 2020 at 20,919 units.
Housing supply and real estate costs
Property prices will be under pressure when there is a low demand for homes and many unsold private housing stocks, as in the Asian Financial Crisis of 1998.
However, there will be upward pressure on property prices when there is a high demand for homes and a small number of unsold housing units.
In six consecutive quarters between Q2 2021 and Q3 2022, the take-up ratio of the residential launch volume exceeded 100%, meaning that more developers sold units than were actually launched. The number of unsold housing units decreased as a result.
The quarterly take-up ratio for private homes during those 18 months varied from 123 to 298 percent. The take-up ratio was 147.6% as developers launched 10,804 private housing units and sold 15,943 units.
Effects on the real estate market in 2023
It is anticipated that this year’s private housing sales will range between 7,500 and 8,000 units. Although the primary market sales in 2022 are between 38 and 42 percent lower than those in 2021, they are still sufficient to reduce the developers’ stock of unsold units.
Even if developers sold the same number of homes in 2023 as in 2022, their inventory would still be below 10,000 units for the entire year.
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I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.
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