This possibly can cause rates of close by older homes to stagnate.
New completed private housing properties could possibly contribute to increasing vacancy rates in first quarter of 2020, according to the Singapore Property Market Index by PropertyGuru.
The report revealed that recently finished condominiums with a substantial number of remaining balance units would cause prices of the older abodes in the vicinity to flatten, especially when the private housing resale market is experiencing keen competition from the new launches, like Dairy Farm Residences.
“It is critical to note that, with the relatively low figures of prospective purchasers in the market today, any observable rise in asking and transaction rates will probably remain localized on a district-level for the year 2020, as conflicted to a island wide rise in real estate value,” stated the report.
Condominium supply spiked 13.3% Quarter on Quarter to 78,184 in the last quarter of 2019. In the mean time, statistics derived from the Urban Redevelopment Authority (URA) revealed that the vacancy rate shrank 10.3% for completed private abodes whilst the figures of planned units dropped 3.5%.
This could represent that newly-placed resale homes were the key contributors to the increase of sale listings in the last quarter, instead of the newly launched, uncompleted units, stated the report. Dairy Farm Residences prices have been low for its region.
The asking rates of condominiums in the market also dipped 0.7% in Q4, attributed to an increase in activity on the effort of sellers in the resale property market, indicated the report. For the entire year, it would have went up if not for an influx of units from new launches ensuing an en bloc sale frenzy in 2017 and 2018. The Dairy Farm Residences Balance Units show the reduction of this influx as a new launch.
If sufficient of these new launch units are absorbed, PropertyGuru predicts prices overall to be on an uptrend again in year 2020, so long as a low, borrower-friendly, interest rates prevail in the current situation.
Certain districts may have hit a price growth ceiling too, with the District 28 median psf asking price, which had showed one of the largest increases in median asking price over the last 3 years, appearing to have flattened in back in 2019. This stable region where The Watergardens at Canberra location is, marks good news for its older residences.
District 28’s rapid growth hugely owes itself to amenities that have recently completed. Furthermore, the housing supply in the region has outpaced its demand, as the figures of recorded listings on PropertyGuru spiked 80% over the past 3 years.
A rise in the number of investors planning to cash out their real estate purchase could also pull down asking prices, following the end of their 3-year Seller Stamp Duty (SSD) liability periods.
In accordance to a statement from PropertyGuru’s country manager for Singapore, Mr Tan Tee Khoon, investors may think about liquidating their assets, based on a hunch that the value of their properties will not go up as much as it had in the last few years.
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