The number of private residential units are available for sale is expected to at least double in the next one to two years, National Development Minister Lawrence Wong said at a dinner gathering of developers yesterday.
A large part of the supply will come from the redevelopment of projects sold en bloc. With enough supply to meet housing demand, Mr. Wong urged buyers to do their homework before making a purchase.
To drive home his point, he noted that the vacancy rate for private residential units has been at above 8% within two years. The last time vacancies were at such raised levels was more than 10 years ago.
“What this means is that, in terms of real physical units, there are more than 30,000 vacant private housing units – all still looking for occupants,” According to him.
“This is more than the total number of dwelling units in the whole of Bishan today.”
Mr. Wong was speaking at the 58th-anniversary dinner of the Real-Estate Developers’ Association of Singapore, where he again used a word of caution to developers on the risk of over-aggressive land bids.
Mr. Wong said that with land prices being high
and a requirement for developers to complete the sale of a project within 5 years of the site being awarded.
While the majority of developers are very responsible to do this, the Government has received feedback from time to time about some which do maintain expected quality standards, he said, adding that he had asked the Urban Redevelopment Authority and Building and Construction Authority to step up their checks.
For developers, who have a very poor track record, the Govt. will consider further measures to hold them to higher standards of accountability, for instance.
The Government may not allow them from launching new projects in the market until it is certain that they are committed to meeting suitable standards, he said: “In working out these tighter regulatory measures, we’re mindful not to add to overall regulatory costs.”
According to Mr. Wong Government try to make a balance between watching the property market with vigilance while acknowledging there will be ups and downs in it. “As far as possible, we make use of the various levers we have to achieve a more stable and sustainable property market,” he added.
Regarding developers’ bidding behavior, Mr. Wong said in Parliament that higher land bids may not translate to higher selling prices when a project is launched as these are ultimately subject to market demand and supply forces.
Reda’s President Augustine Tan had a nuanced view of developers’ bidding behavior. He noted that in the purchase of sites from the GLS programme or private collective sites, the market has seen “different risk appetites of developers who had different views on how supply and demand would pan out”.
Adapted from: The Straits Times, 15 November 2017