New
home completions could come in below URA estimates
DTZ's estimates for 2009 to 2013 trail those of URA by about by 21%
(SINGAPORE)
The number of new private homes completed in the next five years could
come in 21 per cent lower than official estimates, a new report by DTZ
says.
Based
on estimates released by the Urban Redevelopment Authority (URA) at
end-2008, an average of 11,626 private housing units a year were scheduled
for completion from 2009 to 2013.
This
is 34 per cent higher than the annual average of 8,671 units in the
past 10 years (1999 to 2008).
However,
DTZ puts annual average completions between 2009 and 2013 at just 9,143
units a year - some 21 per cent under URA's estimates.
This
year, about 10,000 units will still be completed because they are already
under construction, DTZ said. This will exert downward pressure on rents
and prices.
'Since
Q4 2007, the number of private residential units in the pipeline has
decreased every quarter, and more completion dates have been pushed
back to 2012 and beyond in view of the weak property market outlook,'
DTZ says in its report.
And
in Q4 2008, there were even more delays, as an increasing amount of
the projected supply was pushed to 2013 or later with the rapid deterioration
of the economy.
DTZ
also pointed out that during the 1997-98 Asian financial crisis, projected
completion supply at end-1997 for the four-year period from 1998 to
2001 was 42 per cent higher than actual completions. The over-projection
was especially higher for the later three years (1999 to 2001), in the
range of 50-75 per cent per year.
Similarly,
during the 2001 economic slowdown following the crash of Internet stocks,
projected completion supply at end-2001 was over-estimated by 7-21 per
cent a year from 2002 to 2005, or about 13 per cent for the four-year
period.
DTZ
also said that based on the 10-year average annual take-up of 8,014
units, it will take five and a half years to clear the inventory of
44,661 unsold private residential units with and without pre-requisites
at end-2008.
This
figure has come down 9 per cent from the peak of 49,157 units in Q1
2008, but increased 1.6 per cent from Q3 2008 as take-up dipped to a
record low in Q4 2008.
'We
expect take-up to remain low this year, between 5,000 to 6,000 units,
with more sales likely to take place in the second half of the year
as price expectations between buyers and sellers close,' said DTZ's
senior research director Chua Chor Hoon.
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