Jones Lang LaSalle (JLL), a global property consultancy firm, has expressed a different view from most analysts who have said that Singapore will face a housing glut between 2013 and 2015.
“Demand for housing is likely to remain fairly stable and support the injection of new stock over the next few years,” said Dr Chua Yang Liang, Research Head of JLL Southeast Asia.
It added that the residential market will not see a correction in 2014 and 2015, even though a large amount of new homes are due for completion over those two years.
JLL believes that an average of around 50,000 HDB flats and private homes will be available each year in 2014 and 2015.
Dr Chua noted that the housing market will not contract as a result of new stock. He added that the growth in population over the past few years has outgrown the rise in physical housing stock. This implies that the demand backlog is expected to keep prices stable.
JLL employed two different rates of population and immigration growth to determine the expected state of Singapore’s housing market in 2014 and 2015.
In the first scenario, the group assumes that Singapore’s population is just 5.2 million by 2015. This implies that the cumulative residential stock (the total number of houses available for rent and owner-occupation) cannot meet the total demand in 2014.
Dr Chua noted, however, that supply will be greater than demand in 2015.
As a result, the official property price index is expected to rise by an average of 1.8 percent a year until 2015.
In the second scenario, JLL assumes a total population of 5.5 million in Singapore by 2015. This suggests that the new housing stock may be insufficient in both 2014 and 2015 to meet annual residential demand.
As a result, property prices could rise by an average of 7.5 percent per year from 2011 to 2015.
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