Looming pipeline supply could spur mass-market projects price corrections

Total unsold inventory had climbed to 35,000 units in 1Q 2011 from 33,000 units in 4Q 2010.

According to CIMB, this has yet to take into account the 8,100 units available under the confirmed list of the GLS programme.

When combined, the number could translate into 3.9 years of inventory.

The bulk of the increase in unsold inventory had been contributed by projects outside the central region, which acounted for 41% of the total inventory. With the government continuing to roll out more sites in OCR areas and a slowdown in take-up for new projects, CIMB expects OCR projects to lift unsold inventory higher in the coming quarters.

CIMB believes this build-up of unsold inventory, a looming pipeline supply and all-time high physical prices could spur price corrections for mas-market projects if interest rates head higher.