Beware headwinds in property sector but also seize the day

SINGAPORE (Sept 21): Despite the resale market remaining vibrant in August, with 750 caveats lodged, OCBC Research is maintaining its “neutral” call on the property sector, citing physical oversupply for 2016 to 2017.

In August, primary sales took a beating, dropping to 473 units after July’s bumper sales of 1,091 units (excluding executive condominiums). This could be attributed to the effect of the lunar seventh month, notes lead analyst Eli Lee in a Tuesday flash note.

Year-on-year primary sales were also down, but Lee attributes this to the absence of new launches. The market still remains in a state of physical oversupply, with forecasts for private home prices to dip 5% to 15% over the next two years, as well as persistent pressures on rental rates. The number of private home sales – 5,239 units (excluding ECs) – is in line with forecasts of 6,000 to 9,000 units sold in 2016, notes the analyst.

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