IN A further sign of strengthening demand in the property market, more home buyers are picking up new but unsold units in completed projects.
The stock of unsold completed homes has halved in just one year, despite more launches of brand-new, yet-to-be-completed developments in the same period.
This trend, which is being driven by an influx of expats looking for move-in homes and a recent spate of collective sales, indicates a quickening market recovery, say property consultants.
Since developers need time to ramp up launches to meet rising demand, people who are looking for immediate purchases tend to look to unsold stock in already completed projects.
And this, in turn, indicates that demand for homes may be outpacing current supply in some areas.
There were only 849 completed homes that remained unsold in the July to September period this year, down from 1,813 in the same time last year, as shown by the Urban Redevelopment Authority's (URA) latest figures.
This number is likely to have dropped even further, with major completed projects like The Nexus in Bukit Timah Road, The Pier at Robertson in Mohamed Sultan Road and The Shaughnessy in Yishun Ave 1 having offloaded at least half their remaining unsold units in the six weeks since September.
This year also marks the first time in at least four years that the number of unsold completed homes has dipped below 1,000, according to property consultancy Knight Frank's analysis of URA data, which goes back only to 2002.
Developers generally start selling units in a project a few years before construction is expected to end, so by the time the developments are completed they are often mostly sold.
The stock of completed homes that have yet to be sold is therefore seen as one measure of residential demand, said consultants.
'Sometimes the market can be recovering so fast that developers don't always have projects ready to launch in a particular area,' said Knight Frank's director of research and consultancy, Mr Nicholas Mak.
He added that this means demand is likely to 'spill over to newly-completed units, or to the secondary market'.
This spillover has been evident despite the fact that more new homes were launched this year.
About 7,400 new homes were launched for sale in the first nine months of this year, compared with 6,300 units in the same period last year.
Apartments and condominiums appear to be particularly sought after, with the vacancy rate of such homes dropping to 7.2 per cent in the third quarter this year - its lowest point in at least eight years.
One major reason for this strong demand is the record number of collective sales over the past two years, which have forced many home owners to look for replacement units ready for immediate occupation, experts said.
'Demand from residents of developments that have undergone collective sales has, to some extent, contributed to the decreasing level of unsold completed stock,' said Dr Chua Yang Liang, head of Singapore research at Jones Lang LaSalle.
More than 1,000 homes will be withdrawn from the market this year due to developers tearing down existing projects on collective sale sites, said property consultancy Savills Singapore.
This withdrawal will peak next year, with 3,489 units scheduled to be taken off the market, added Savills.
But market watchers are not worried about a future supply crunch for completed homes, as the number of such units may increase next year with several large projects scheduled for completion.
These include the 387-unit Orchard Scotts, the 208-unit Residences @ Evelyn, and the 778-unit Kovan Melody. As at Sept 30, these three projects alone had 693 unsold units.
Overall, some 7,000 units are expected to be completed next year, according to URA data.
This is considerably more than the 4,700 homes that have been completed so far this year, with another 1,000 in the pipeline for the last three months of the year.
fiochan@sph.com.sg
