Singapore wary of housing oversupply
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The Singaporean Housing Board is on track to meet its target of building 13,600 flats this year, despite the drop in foreign labour.
At the same time, the government is keeping a close eye on the supply of both public and private homes, to avoid creating a problem of having too many flats.
This delicate act of ramping up supply without causing a glut is a key strategy in the government’s move to engineer a soft landing in the housing market, said National Development Minister of Singapore Khaw Boon Wan.
For the public sector, “I don’t see [a glut] happening, not this year, not next year”, Khaw told reporters at a handover of a Build-to-Order (BTO) block of flats in Woodlands.
He is less optimistic about the private sector, where the threat of an oversupply is a bigger worry as owners may be unable to earn the rental income to pay their loans.
On the other hand, he is “slightly more relaxed” about oversupply in the public sector because “I want to build up a little bit of an inventory to allow for people to, almost on demand, buy a flat”.
Still, the current building pace is not sustainable and he expects the number of new HDB flats built to moderate after 2015.
“As we clear the backlog, we should be able to move back to a steady state, not necessarily even 15,000 units a year,” he said.
The reason: Some of the 15,000 couples who marry each year – HDB’s core target group – may want to buy resale flats, he noted.
In the past two years, the pace of building has quickened, after Khaw became the National Development Minister and set out to provide the backlog of married couples with their own homes.
The full impact of the move will be felt in the next two years, with 26,000 to 29,000 new flats set to be completed each year.
