By Joanne Chan | Posted: 11 June 2011 2054 hrs
SINGAPORE: Market watchers have said there may be an oversupply of private homes in two to three years’ time, when most developments are completed.
They cautioned that while a good economy may see these units gradually taken up, a downturn will send the property market into a depression.
National Development Minister Khaw Boon Wan issued a “health advisory” on his blog, urging investors and upgraders to think hard before buying a new home. He warned that “sharp property prices cannot go on forever”.
Those hoping to make a profit by re-selling or renting out apartments may find themselves competing in an increasingly crowded market.
By some estimates, as many as 93,000 new homes could hit the market over the next five years.
SLP International’s Executive Director of Research and Consultancy, Nicholas Mak, said there are roughly 80,000 homes currently under development. He added that this does not include government land sales parcels sold and en-bloc sales in the last six months, which can yield another 13,000 new homes.
Mr Mak said: “Those people who may have a bit of spare cash and are thinking of buying any property, perhaps as a hedge against inflation, I would sound a word of caution that they should look very carefully, look at their own finances, and also to see the property they are choosing, is it something that can be easily rented out when it’s completed.”
Others are optimistic that the property market will be boosted by investors from neighbouring countries.
David Poh, Senior Group District Director of PropNex, said: “Asian economies will continue to grow very strongly in the next few years, especially major foreign buyers market like China and India.
“So with these strong economies over there, with [Singapore’s] good infrastructure, good government, good environment, I’m quite sure they will continue to invest in properties in Singapore.”