MORE than 10,000 new private homes are expected to hit the market over the remainder of the year, according to a new report.
Property consultancy Savills said these projects will mainly come from the Government Land Sales (GLS) programme with most of the upcoming homes catering to the mass market segment.
Based on the 8,000 units, including executive condominiums, put up for sale in the first five months this year, Savills estimates the total this year will surpass the 18,000 - including executive condominiums - launched for sale last year.
The Urban Redevelopment Authority (URA) has said the expected supply of new homes poised to hit the market over the next few years could be as high as 53,000.
Mr Alan Cheong, Savills' head of research, said it could take around four to five years for the market to fully absorb these unsold homes. His calculations are based on the average annual take-up over the past five years of about 12,000 new homes.
Data compiled by Savills shows that about 70 per cent of the homes will be in neighbourhoods along the city fringe such as Thomson and Bendemeer while 17 per cent will be in suburban areas, including Tampines, Bishan and Upper Serangoon. These are mainly GLS sites.
The remaining 12 per cent will be in city centre areas like Newton, Holland and Orchard Road. These mainly come from private land sales.
The large number of homes to be put up for sale later this year suggests that developers may be keen to launch their projects soon due to uncertainty about the global economy and the outlook for the property sector.
Another factor is that many of the sites are from the GLS programme.
Mr Lim Yew Soon, managing director of EL Development, said developers who have bought GLS sites are less likely to hold back from launching their projects.
He said: 'The Government is still releasing a lot of land so it doesn't make sense to hold on to the site and wait.
'GLS sites also come with a condition that the land must be developed within five years of its sale, so developers can delay their launches for up to two years but anything longer than that is not possible.'
Analysts are still cautiously optimistic that the buying momentum experienced so far this year will continue for the rest of the year.
Ms Wendy Tang, Knight Frank's executive director of residential services, said that while the market is cautious because of the uncertainty about future housing policies, she expects demand for new homes to remain healthy.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said global issues such as the euro zone debt crisis that have been impacting the stock market have also influenced buying sentiment.
'The recent (euro zone debt) crisis... has now passed. The economic fundamentals present in the first half of this year are still present so I don't see why the buying shouldn't continue,' he said.