Business & Economy Property Large private homes supply but are we building a house of cards?

Large private homes supply but are we building a house of cards?




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A report by List Sotheby’s International Realty Singapore said that a large private homes supply will hit the property market soon. The report suggested that with the expected launch of 29 developments from this quarter to the end of 2018, as many as 14,200 private homes may come into the property market. The property agency said that if the developers launch their projects strategically, the market should be able to digest the large volume of private residential units which will come to the market this year.

Sotheby’s reviewed the recent government land sales (GLS) sites as well as those from successful collective sales to arrive at their inference about the large private homes supply. The firm made the assumption of a period of nine to 12 months for the GLS sites to obtain all planning approvals before being launched for sale, and 15 to 18 months for the collective sale sites.

Based on these assumptions, the firm has identified 29 sites acquired by developers between mid-2016 and August last year that could be launched later this year.

These new projects can result in a large private homes supply of an estimated 14,200 units being launched. Six of these sites are in the core central region, which are areas such as Orchard Road, 13 are in the rest of the central region that includes areas like Tanjong Rhu, and 10 are in the outside central region, which refers to the suburbs.

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While these volumes of large private homes supply may seem high, they are not unprecedented said Sotheby.

Based on Urban Redevelopment Authority statistics, developers launched an average of 15,400 units a year from the years 2009 to 2011. Sotheby’s, which pointed out this statistics following the sub-prime crisis in 2008, said inventory under construction (launched and unsold, and unlaunched projects with planning approvals) held by developers was around 35,000 units. The unsold inventory as reduced to 18,900 units by end-2017 when demand picked up lat year.

Sotheby’s associate director for research Han Huan Mei said that “for developers to launch around 15,000 units (in) the remaining part of this year may be possible for the market”. With the market still on a recovery track, this level may not be too much for it to digest. Also, developers have sold many of the units from existing projects.”

She added: “developers will also likely pace their launches, depending on their business strategies”.

Enbloc Sales – Huge Property supply coming

The report noted that developers have already built up a substantial land bank in the past two years and with land prices on the rise, they may become more selective with bidding for en bloc sales.

Sotheby believes that demand for the large number of private homes will be driven by liquidity, low interest rates, as well as interests from those who sold in this latest round of collective sales. The property agency believes that the property cooling measures will cap demand and prevent overheating in the large private homes supply.

International Property Advisor chief executive Ku Swee Yong pointed out that the number of large private homes supply may be much higher. In speaking to the Straits Times, Ku said that “as of fourth-quarter 2017, there are 27,940 and 3,080 vacant private residences and executive condominiums respectively.”

He warned of adding supply to a market with shrinking end-user demand with high existing vacancies, and said, “the problem is, unlike the previous cycle, we have a lot of vacant units today due to decreasing expat population and weak job market.”

“We may be building a house of cards,” Ku warned.

Paul Ho, chief mortgage consultant at, said that savvy investors (those who already have more than 1 property), should stay away from the market as the prices are crazy, the fundamentals are weak and there is huge supply in the pipeline.

If you are home-hunting, our Panel of Property agents and the mortgage consultants at can help you with affordability assessment and a promotional home loan. Just email our chief mortgage consultant, Paul Ho, with your name, email and phone number at

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