You might have read our blog post about the upswing in the property market, and might be thinking of taking action for your family. However, you have your reservations....
After speaking with many investors and homebuyers, we have understood the concerns and misguided beliefs of most Singaporeans. Therefore, we have decided to create a 6-part series addressing common myths using data and facts we have gathered.
Today, we shall be touching on the myth of an "Oversupply Situation"in our current property market. In order to understand the supply and property market, we need to also understand the government's objective and role in the property market.
Our government is one of the most proactive governments in the world. And their main objective for the property market is to promote a stable and sustainable market place. And during the previous property market upswing (2Q2009 - 3Q2013), our government introduced 7 Cooling Measures to manage the market exuberance.
You can see that most of the cooling measures target the demand factor, however, only 1 of the Cooling Measures actually targets the supply.
Basically QC and ABSD prevent developers from hoarding onto land, thus artificially reducing supply in the market. Before the implementation of QC and ABSD on 8th December 2011, developers held onto 40,000 - 45,000 units of unsold inventory. But after the implementation of QC and ABSD, developers are forced to develop and sell land they buy within 5 years.
On 5 Sep 2017, Morgan Stanley reported that Singapore is experiencing historical low unsold inventory – Below 17,000 units as of 2Q 2017
*Ever since its implementation in 2011, unsold inventory has been steadily decreasing*
And this supply is dwindling fast, which has caused developers to become hungry for land. Which has resulted in the En Bloc Fever.
Supply in the pipeline supply is also at its historical lowest, as you can see below.
Even with the En Bloc and land sales, the pipeline supply is still decreasing, and supply is below the 10-year average of 13,319 units.
Now with the data and facts presented to you, do you still think we are having an oversupply situation? It is clear that in the future to come, supply of housing units and land will shrink.
So what are you going to do today? What changes are you going to take to help yourself and your family for the future?
If you are still lost or unsure, please contact us today for a free discussion. We have helped many clients to create a clear strategy plan for their future housing needs.
Many Thanks Teoduoproperty
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