Singapore’s northeast at risk of housing oversupply: analysts

While home prices in the northeast district are expected to be stable in the coming year, analysts say the area may potentially see an oversupply of homes in the future.

In the next few years, Punggol, Sengkang and Pasir Ris will continue to see intense construction activity, with market watchers expecting some 17,000 residential units to come onstream in the area over the next five to six years.

Later this year, developers are expected to bid for 4 sites in the northeast which are expected to yield some 2,000 executive condominium units. This will add to the 3,295 units from sites released in the area by the government in the first half of the year.

Despite this, experts predict a well-located site to see eight to 10 bids from developers.

“Pricing will be competitive in Punggol area and Pasir Ris, more so because there have been a couple of launches in the second half of last year GLS programme and also the first half of 2012,” Alan Cheong, Research Head of Savills Singapore, said.

“There will be a bit of competition among developers, but prices will remain competitively stable.”

Under the Government Land Sales, a commercial site at Punggol will be put out for tender in the second half of 2012. Still, some market watchers point out that Singapore’s northeast precinct lacks economic activity, reducing its attractiveness in residential leasing and resale.

Analysts also say the lack of education and commercial activities to anchor the area could drive buyers to consider homes in other estates.

For now, prices are expected to remain stable over the next one to two years.

According to analysts, median prices of new private homes in Sengkang are nearly S$1,000 per square foot, and nearly S$900 per square foot in Sengkang and Pasir Ris.

Source : Channel NewsAsia – 27 Jun 2012

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