No Oversupply of Homes in Singapore in 2010
Many fear that there will be an oversupply of private home in Singapore next year in 2010. However, there could by a situation of shortage.
The Urban Redevelopment Authority's (URA) second quarter 2009 real estate statistics showed that the potential oversupply maybe in 2011 or later. This is because many developers delay or even cut down on project development.
The number private condominium target for completion for 2011 has been reduced to about 5400 units. As compare to 2008, the number of condominium estimated at 17,000. This is a decreased of 70 per cent.
As developers reduced the number of the building, property buying has increase back to the previous peak in 2007. For the month of May, June, July, there are more than 1000 private property had been transacted monthly.
With this there may be a possibilities that private property prices and rents could increase in 2010. Mainly caused by the supply side.
The number of completed units could be difference from the number sold, due to caveats issue, as the developers could sell uncompleted units or be unable to sell the completed properties.
Based on URA statistics in the boom period of 2007 and 2008, many developers are confident that the private homes will be sold quickly. However with the Lehman Brothers incident in September 2008, it triggered the slowdown of the economic.
The incident initially caused much concern that private properties would not sell. The developers since then slashed some projects and pushed back the completion of the private properties. As a result, URA's figure for the total planned units for completion in 2009 showed a decline of 6000 units.
Although almost all the URA's projected completion statistic had drop gradually in 2008, there are already signs of bottoming up in 2009. In the third quarter of 2008, it was projects that around 13000 to 1600 units will be completed yearly after 2010.
Many project completions had be delayed from 2010 to 2011. For the first half of the year 2009, about 5200 private property unit have been complete. For example, the completion Casa Merah recently had continue to pull in the crowd of mass market buyer.
By Ethan C
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