Singaporean property developers say an oversupply of apartments and a stagnating economy are set to suppress housing prices.
The president of the Real Estate Developers Association of Singapore, Chia Ngiang Hong, said the Lion City’s home builders feared that oversupply could lead to disappointing returns on major developments.
“We hope the government will continue to watch the pulse of the market, with the aim of maintaining a stable and sustainable market in line with economic fundamentals,” Chia said.
He also said the real estate body would form a committee to raise developers’ concerns with the Singaporean authorities.
The property chief on the island, which is about half the size of Houston, said the market was challenging and developers were becoming more cautious about making bids for plots.
The Urban Redevelopment Authority (URA) said there were about 39,000 private homes in construction, although the figure had “declined progressively over the past few quarters”.
Meanwhile, Singapore is the world’s second-fastest ageing society after South Korea, according to the United Nations.
Last week, Singapore’s central bank warned that an oversupply of homes could push down prices.
The URA has announced the government’s land sales programme for the first half of next year, including sites that could provide about 6,490 private homes and 1,070 hotel rooms.
The authorities had decided to keep the supply of homes on the confirmed list for the first half of 2020 “broadly similar” to that from the second half of this year, the agency said.
Singapore development minister Desmond Lee also said on Monday that the government “cannot take a hands-off approach to the property market”.
“Within the domestic market, we expect more supply … to come on stream. Developers should pace out the launches steadily, to match the demand from buyers,” Lee said.
Singapore’s factory productivity fell for the seventh consecutive month in November but the fall was slower that that in October.
Last month’s Purchasing Managers’ Index (PMI) of manufacturing activity and confidence was 49.8, according to the Singapore Institute of Purchasing and Materials Management.
October’s reading was 49.6 with a score of 50 separating expansion from contraction.
“The latest PMI reading was boosted by faster rates of expansion in both factory output and inventory, as well as slower contraction rates in new orders, new exports and employment,” the institute reported.
Concerns about rising global trade tensions into next year could have contributed to the disappointing trade figures, said the OCBC Bank’s strategy boss, Selena Ling.
The mixed macroeconomic outlook for next year could also explain the figures, she added.
“But as the US-China trade negotiations have been one step forward and one step back, the trajectory is not smooth sailing yet,” Ling said, adding that Vietnamese, Indian and Philippine PMIs were still “treading underwater below the 50 handle”.
“The domestic manufacturing sector may see modest positive growth in 2020, but we do not expect a sharp V-sharp recovery at this juncture,” the analyst said.
Sentosa. Picture credit: Wikimedia