Recently MAS had warn the public amid rising home supply on 29 Nov 2019. Many home buyers are concern if they should enter the market right now or adopt wait-and-see approach. While the concern is genuine basis, we should look at the fact & figure to see if this current supply glut is a breaking point for property price to come down.
From the charts above obtained from URA and SRX, the highest supply we had experienced was at 2008 stand at 43,414 private new homes. However, we would like to bring you to the supply trend from 2011 to 2017. The supply is gradually reducing to only 18,891 on 2017. Compare to the price trend, it actually stabilized and move up eventually. Interestingly, from year 2014 onward the average total number of units sold annually are less than 10,000. But the price is gradually increase. This bring us to the next chart below.
For full detail of Singapore Cooling measures: Click Here
With the first cooling measure implemented on 20 Feb 2010, the average Per Square Foot (PSF) successfully drop gradually. However, it didn’t dampen the home buyers’ mood as the total volume went up. The game changer happened on 29 June 2013, government introduced Total Debt Servicing Ratio (TDSR) to the property market. It restricted to the amount of loan quantum a borrower can borrow base on his income comparing to the past. This successfully smoothed the speculation activities on real estate. Which explain why the total volume came down significantly since 2014.
Despite few more rounds of cooling measure, the price still gradually increase 3.3% annually. This is inline with the economic fundamental and inflation of Singapore. The purpose of this article is to highlight to potential home buyers that risk of oversupply glut is unlikely to cause the price to dip. With the cooling measures are in place and not going to remove anytime soon, home buyers are ensure purchasing a new home be it for investment or own stay are regulated within their mean.
So what really drive the demand for Singapore Housing market?