SINGAPORE (NewsRise) -- Sales of new private homes in Singapore hit a three-year high last year as developers lured buyers with lower prices, raising hopes that an oversupply of apartments will ease in coming months and that property prices could stabilize.
Data released Monday by the Urban Redevelopment Authority (URA), the city-state's land planning agency, showed private developers sold 580 apartments in December, bringing the total for the year to 12,408. That's up from 10,199 units in 2015 and 9,026 units in 2014.
The annual figures were tallied by real estate brokers PropNex Realty and include executive condominiums, which are lower-cost apartments built by private developers for sale to locals who meet conditions specified by the Singapore government.
PropNex forecasts private home sales in Singapore will stay around the 12,000 level this year, with developers "taking a slow and deliberate approach in launching their projects as well as having a competitive pricing strategy to further entice buyers."
Private home prices dropped by 3% in 2016, according to URA data, falling for the third straight year as higher stamp duties and borrowing restrictions reduced purchasing power. Residential prices in the city-state have retreated more than 10% since they hit a peak in 2013.
Swiss bank UBS said earlier Monday that Singapore private home prices, while still expensive, are no longer in "bubble territory" due to the government's cooling measures.
"Singapore has moved from overvalued" to "fair value" in our index...We expect a 4% decline (in private home prices) this year because of the significant supply but by 2018, the market could see a balance," Tan Min Lan, who heads the Asia Pacific Investment Office at UBS Wealth Management, said at an investor conference.
Stock broker Maybank Kim Eng said in a report on Wednesday that while falling inventory levels may arrest further declines in home prices, intense competition for new land parcels could still crimp margins for developers. Its comments followed a hotly contested government land auction last week.
UOL Group is Maybank Kim Eng's top pick among Singapore developers due to its large recurring income from investment properties and residential land holdings that were acquired at conservative prices.
The stock broker is also bullish on giant developers CapitaLand and City Developments , which may benefit from a reallocation of funds arising from the likely delisting of warehouse operator Global Logistic Properties.