Singapore property market experienced robust sales in 2017, a surge in developers’ sales volume of 10,566 units, 33% more than the 7,972 units in 2016.
The recent en bloc waves are overwhelming, therefore MAS urged developers and home buyers to be prudent.
Will Singapore property oversupply or bubble?
Some said oversupply issues may arise in the coming years while en bloc frenzy seems unstoppable. However, let’s take a look at the facts and history.
There is short of supply in Government Land Sales (GLS). From 28 in 2012, followed by 16 in 2013 and 13 in 2014, thereafter 8 in 2015 and 2016. It is obvious that the land supply is getting less. It was last year then URA released 10 new sites.
Therefore, there is no other option for the developers but to snap up en bloc sale to bag their land bank. Since May 2017, the land bids turned fierce and caused en bloc seems unstoppable.
How long will en bloc rally end?
Let’s take a peek at what was happening 10 and 20 years ago.
In the 3 years after the Asian Financial Crisis in 1997, almost 100 en bloc sales were completed. Whereas before the Global Financial Crisis hit in 2007, almost 170 en bloc sales were dealt.
Till date, there are less than 40 en bloc projects being successfully transacted since 2016. This makes the en bloc sales since 2016 seems small compared to the last two waves.
In addition, Singapore population has increased from 4.6mil in 2007 to 5.6mil in 2017, there is a positive of 100,000 people in Singapore over the 10 years period.
Not forgetting that, the recent en bloc projects’ 4,500 homeowners are also looking for the home replacement. As a result, there is an increase in demand for Singapore property.
In the near term, we think there is room for optimism as this round of en bloc sales looks set to boost prices in the private housing market. It is too early to panic about property oversupply.
In my opinion, as long as the total number of en bloc sales in the past 3 years does not exceed 100, the property market is still healthy.
Check out the list of the past, present and upcoming En Bloc Singapore: