Record 18,400 new homes expected to be completed in 2013

Supply flood this year set to further cool market and slow rental growth

A record number of homes is expected to be completed in Singapore this year.

This comes on the back of the bumper land supply pushed out by the Government to tame the red-hot property market in the past few years.

An estimated 18,400 homes are set to be built this year, easily eclipsing the previous high of 14,600 units built in 1997, Urban Redevelopment Authority (URA) data out yesterday showed.

This supply is likely to cool the market further after the seventh round of measures - which included tighter loan limits and higher stamp duties - was unveiled in January this year.

Rental growth is also expected to slow towards the latter part of the year in the light of these completions, experts say.

Already, private home prices have moderated in both the landed and non-landed segments as the slew of curbs take red-hot temperatures in the property market down a notch.

Prices inched up just 0.6 per cent in the first three months of the year, well down from the 1.8 per cent gain in the period before, according to URA's data.

This is slightly up from the 0.5 per cent increase when the flash estimates were released earlier this month, indicating that prices have accelerated slightly in the final few weeks of the quarter.

The flash estimates are based on transaction prices of caveats lodged during the first 10 weeks of the quarter.

But gains in home prices have softened across the board compared with the final quarter of last year.

Non-landed homes, such as condominium units and apartments, posted gains of just 0.7 per cent, down from 1.8 per cent before. Landed home prices were also up just 0.5 per cent, slowing from a 1.8 per cent rise in the same period.

But rents in the first quarter increased at a slightly faster pace of 0.8 per cent - a clip higher than the 0.7 per cent previously - as rental demand remained healthy.

Experts say the cooling measures are filtering through the residential property market, with developers dangling discounts and investment demand from buyers retreating.

The number of resale and sub-sale transactions has also dropped, they noted, with most predicting private home prices to rise about 3 per cent to 4 per cent this year.

However, the coming months will be the real litmus test for market demand and the effectiveness of the cooling measures as more new residential projects - particularly from the ramped-up Government Land Sales programme - are progressively launched.

Ms Chia Siew Chuin, Colliers International's director of research and advisory services, added that although private rents have continued to creep up in the first quarter, they are expected to be modest for the rest of the year.

This is the result of a steady stream of new project completions and the Government's tightening of foreign worker inflows.

Major projects completed in the first quarter include NV Residences in Pasir Ris, with 642 units, Ascentia Sky in Alexandra View, consisting of 373 units, and the 329-unit The Gale in Flora Road, CBRE noted.

Other completions expected for the rest of the year include CapitaLand's The Interlace at Alexandra Road, with 1,040 units, Tampines project Waterview, comprising 696 units, and the 616-unit Waterbank at Dakota.

esthert@sph.com.sg