3 Ways to Determine the Supply & Demand of the Location


Updated on 13 May 2020

Supply and demand are fundamental to the property market. The location with low supply and high demand is what we should look for, right?

But, how do you measure the supply and demand of a particular location?

Now, I’m going to reveal the “3 ways to determine the supply and demand of the location”.

  1. Rental Return & Vacancy Rate

From my experience, one of the main reasons why homeowners wish to keep and have no intention to sell their property is because of the high rental yield.

Because they are comfortable to collect high rental income and not easy to find another property with high return.

I like to use Clement Canopy as an example. Again, I mentioned before the rental for the 2-bedroom in Clement Canopy can fetch up to $3,600 which is quite high.

This project consists of 505 units. By referring to the property portal at this moment, there are 14 listings for sale and 13 listings for rent. 13 units out of 505, we get 2.6%. That could mean that the vacancy rate in Clement Canopy is only 2.6%.  It performs much better than the overall private property market in Q1 2020 which is 5.4% vacancy rate. This translates that the landlords of Clement Canopy can find the next tenants within a very short period.

So, why does Clement Canopy rental return is so good with low vacancy rate? Most likely it is due to the undersupply and high demand in the region itself.

2. Propertyguru Insights

We all know that PropertyGuru has the most listings for resale properties.

They can base on the number of listing on the market to determine the number of supply.

PropertyGuru has the highest number of visitors. So, when you go and search particular property, they capture the data and based on that they can read the market demand.

Therefore, PropertyGuru has this feature known as “Market Supply Gap” for every single district.

Let me show you an example. District 15 for Marine Parade and East Coast area. The data shows that the 3 Bedroom unit has high demand and low supply. Therefore, it shows this is a good opportunity for 3-Bedroom sellers.

Take a look at District 19, Punggol, Sengkang and Hougang. The 4-Bedroom the demand is high while the supply is low. So, it’s a good opportunity for the 4-Bedroom sellers.

3. Population (Demand) vs Total Number of Units (Supply)

I would deem the total number of residents of the town as the demand. While the total number of condominium and apartment is equivalent to the supply.

I got these data from the Department of Statistics Singapore.

I take Tampines estate as an example. There are more than 250,000 residents and 26,900 units of condo in Tampines, and the rest stay in HDB flat.

I divided the number of residents by the number of units. I get 9.5. Let’s round up to 10.

In other words, in every 10 persons in Tampines, there is only 1 stay in a private condo. The higher the number, the better the demand oversupply.

Let’s look at another example, this time I am looking into a subzone.

Ok, Potong Pasir. The total number of residents is 11,700. And the total units of condo is 1,790.

After dividing the numbers, I get 6.5. So, I round up to 7.

Meaning that in every 7 persons in Potong Pasir, there is 1 stay in a private condo.

I have done the summary for every single estate. As a result, I feel that Outram seems to be the highest demand oversupply in Singapore.

By using this concept, you can identify the supply and demand of each location.

I have the subzone numbers which is more detail. If you wish to download, click the link here.

condo Supply vs Demand

Conclusion:

To understand and determine between supply and demand of a region, you may refer to these 3 ways:

  • Rental return and vacancy rate.  A place with high rental income and the low vacancy rate is likely to be the place that is undersupplied and high demand.
  • PropertyGuru insights. Because most homebuyers are searching through this property portal. Therefore, most agents including me will still publish all the listings there. And that’s why PropertyGuru can detect both the supply and demand and eventually produce the “market supply gap”, which can be used as the reference for supply and demand of the district.
  • The data for the total number of population and total units of condo in every single subzone of Singapore. I deem the population as demand and the total units of condo as supply. If the demand oversupply is very high, it could an indicator to tell the undersupply of that location.  However, this method only works well for HDB estate. We cannot use apply this method for the central region because mostly are private properties.

I hope my article is helpful to you. Appreciate your support and contact me directly if you have any question.

Plan For Yourself is very Important!

As a lot of people never plan anything before going to showflat, they usually end up paying more for a less ideal unit; thereby making less profit as compared to a better valued unit.

I suggest we have a short meet up first where I can share with you based on your case and what is the best scenario moving forward and based on the market now what are the projects best suit you!

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    3 Ways to Determine the Supply & Demand of the Location
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    2022-02-26
    Stephen is a very good agent who goes beyond his way to ensure that his clients are happy. He is very patient and helpful, and will always give good advice.
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    Joseph Sze
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    Stephen is a professional & responsible person who has provided good quality customer services to our recent Condo housing purchase & related matters. I found he has put in great efforts and gone for extre miles to assist us in the whole process and related purchase issues. Excellent work, Stephen!👍🏼👍🏼👍🏼
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    Was going thru Stephen's video when I noticed he had a google review panel up. Going to copy paste my review on his FB page from 2019. I still stand by my review. Stephen was very professional throughout our engagement process. I first engaged Stephen as his effort could be seen thru the videos he made. The videos were informative, detailed, yet easy to understand from a beginners point of view. Could also see the improvement of his videos as time passes, and that speaks volumes about one's character on his eagerness to improve and share. During my engagement with him, Stephen was very professional. Since I was very new in the scene, I required alot of guidance and honesty. Stephen was very upfront with me on many items and did not try to hide any facts from me. As a first time buyer, both good and bad prospects were laid out after his detailed analysis on my current financial condition and also on the projects we went to see. Comparing to other agents who will just blab anything that benefits their sales point, Stephen was straightforward and truthful on the issue. I have met quite a few agents but would highly recommend Stephen to people who are looking for properties, be it looking for a place to stay, or looking for a property to invest.
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    Stephen handled both my HDB sale and new condo purchase. The whole process was fuss-free and smooth. What impressed me was his willingness to go the extra mile for his client, from analyzing every detail and being there for me and my wife every step of the selling/buying process.
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    We came across Stephen YouTube video and appreciated the tips he is providing. We decided to engage Stephen when we were house hunting. Most people may feel that you can DIY resale hdb buying process. Personally we feel its money well spent engaging Stephen. The whole buying process is swift. Stephen is very prompt in his reply. He did alot of detailed analysis and recommend us the units we can explore. He is very detailed anf meticulous. This process saved alot of time. He also gave us helpful advice on the units we viewed. No hard selling or rush you into hasty decisions 😊
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    Knowledgeable and professional, Stephen is not the typical agent you will meet. Ever so patient, he will help provide his genuine feedback and never pushy unlike most sales agents. Fortunate to have Stephen walk with me in my property investment journey. Will recommend Stephen to anyone who is looking for a trustworthy agent to walk the mile with.
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    Very patient and give good advise. I bought ec under him and he sold my hdb.
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    I believe every property investors or home buyers have encounters with numerous property agents. However, how many of you ever met someone with passion and enthusiasm to sit down and analyze each property based on your criteria (budget, requirements like location, size, etc)? Having watched Stephen's videos in YouTube, decided to ping him and the rest is unspoken of. Not only did he helped to narrow down our search, he also analyzed which project has higher prospect and which unit (level, facing, etc) fits our living habits. No complaints, except for not knowing Stephen earlier. Good job Stephen, thank you.
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    Stephen was the agent assisting us in the purchase of our condo and now to market them for rental. He is extremely helpful, open, transparent and reliable throughout the entire time. He went above and beyond to help us set things up while we are not in Singapore.He is also very professional and knowledgeable about the property market in general. I am confident to leave our condo in his care to find us a good tenant and to manage them in future.
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