Sentiment in the Singapore property market appears to be improving after the government eased some of its curbs on the sector, but unsold inventory will still weigh in the short-term, a DBS executive said Tuesday.
Speaking to CNBC's "Squawk Box," DBS Private Bank Chief Investment Officer, Lim Say Boon, said there could be a small price rebound in the central region due to limited supply, but prices across the island will "at best" remain stable in 2017 due to corresponding demand-supply fundamentals.
"Stabilizing does not mean that the inventory already built up will not require some years to work through. They will still need some years to work through the inventory that's already out there," said Lim, who added that a sharp rebound across the board was unlikely.
Lim's comments came on the back of budding signs of strength from the property sector. Still, overall private home prices fell 0.5 per cent on-quarter in the first three months of the year - the 14th straight quarter of declines.
Singapore developer UOL Group, however, was upbeat after offloading more than half of the units under construction at its latest Clement Canopy development launched in February.
"It is a good test, because this was the first launch of the year. Analysts were all interested to see what the take up was going to be like," said UOL Deputy CEO Liam Wee Sin, who assists in the management of its global portfolio of more than 11.5 billion Singapore dollars ($8.2 billion) in assets.
"To date, we have about 55 per cent sold. To me that's very good and very healthy indeed," he said.
The development is a 50-50 joint venture between UOL and Singapore Land. UOL has two 40-story apartment blocks under construction, comprising 505 units, each configured with either two or four-bedrooms ranging from 635 square feet to 1,539 square feet.
The pricing varies between approximately $850,000 Singapore dollars ($608,000) to $1.82 million Singapore dollars ($1.30 million).
Unlike other projects of its size, the developer made a conscious decision to not build one-bedroom units, in the hope of attracting longer term investors to the condominium.
"For this particular project, so far we have been getting about 90 per cent local and 10 per cent foreigners buying. They come from either China or Malaysia," Liam added.
"Buyers today are very discerning. Because of the cooling measures, they really have options on the table and can go around from showflat to showflat. At the end of the day, when they move around and compare notes and compare prices, we hope they end up buying a unit from us."
The development is expected to be completed by 2020.
A welcome change
As one of the city state's biggest developers, UOL has welcomed the Singapore government's recent decision to tweak its property cooling measures, and says it expects the curbs to be eased further.
"Just as you have introduced curbs in seven stages, the easing of the curbs in my opinion should be done in stages as well," added Liam.
"People do read it as a signal that the government watches the market very carefully, and where appropriate and at the right time, they are prepared to make some changes."
The city state's housing prices surged more than 60 per cent from 2009 through 2013, propelled by rock-bottom global interest rates and quantitative easing in many major economies, even as the government enacted a series of cooling measures from 2011 to prevent a bubble from forming.
The measures - including an additional buyer's stamp duty, which could add as much as an additional 15 per cent to the price - appeared to have eventually met with some success, with the property price index falling around 11 per cent from the peak in the third quarter of 2013 through the end of 2016, according to data from Deutsche Bank in January.
Although home prices fell again in the first quarter of 2017, the bulk of the decline this time around was in relatively small landed property segment, while non-landed prices were steady.
The Singapore government then took moves in early March to scale back some of the curbs, including lowering the seller's stamp duty and shortening the minimum holding period to avoid it.
Some analysts have said they expect the curbs to be tweaked further.
"The cooling measures have been, I would say, successful in decelerating that momentum in prices and what we've seen is that they've come down from their peak levels about an average 10 to 11 per cent," said Sigrid Zialcita, managing director of research at Cushman and Wakefield.
"We still need a lot of the cooling measures to be taken out if we would like to see prices go up significantly."