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Khaw Boon Wan sees Singapore housing supply rising 11% in three years
The supply of housing in Singapore will increase by about 11 per cent in about three years with the addition of more than 100,000 HDB and 67,000 private units.
Minister for National Development Khaw Boon Wan revealed in a blog post on Friday that by early 2018, the stock of housing in Singapore would have grown to 1.43 million units and that the residential market in Singapore has achieved a better balance between sellers and buyers.
This would be an 11 per cent increase from the current stock of about 1.28 million housing units, of which 960,000 are in HDB estates and the remaining 320,000 in the private sector.
According to a chart posted in Mr Khaw's latest blog entry titled "Shifting the Balance", the projected increase in housing in Singapore in 2015-2018, is 182,506 units. Out of these, 101,000 will be public housing units, 14,220 will be EC (executive condominium) units and the remainder 67,286 will be private units.
"Four years of hard work, ramping up new home construction, is seeing results. As flats and apartments take three or four years to build, we are enjoying the harvests of the hard labour," Mr Khaw wrote in the Housing Matters blog.
"As supply-demand rebalances, property prices are adjusting. 2014 was the first full year which saw home prices in decline. This was a great relief for home buyers. As the decline was moderate, it was also a relief for home sellers and home owners. A collapse of housing market benefits no one," he added.
Mr Khaw explained that as project completion dates vary, the ministry had put up a chart last year to track the pipeline supply of new homes for 2014-2017.
"A total of 200,034 units were projected. With the tapering of HDB's BTO supply, the new figure stands at 195,788. Home buyers have plenty of choices."
An analyst that BT spoke to, however, felt that the rate of increase in the stock of housing here over the three years could be too steep.
"An 11 per cent increase in three years of the number of homes available for occupation is very fast. Our population is not going to grow that fast and therefore a lot of units may go empty," Nicholas Mak, executive director at SLP International, told BT.
He explained that the impact of this may be most felt on the private residential market, primarily on those units for investment, as the chances of HDB units going empty is less as these are for primary residences.
"In the private sector, a significant amount of property is bought for investment. This is especially true for shoebox units and those in the downtown areas, which are mostly bought by investors."
Consequently, he cautioned that there is a risk of a glut in some segments, where investors were buying the units to rent out and added that this could also have a downward drag on rental rates.