[h=1]CENTURY 21 CEO: THERE WILL BE ENOUGH HOMES FOR 6.9 MILLION PEOPLE IN S'PORE BY 2018[/h]
Post date:
16 Jan 2015 - 3:54pm
There is an oversupply of homes in Singapore but if we allow the homes already planned to be built to be completed, Singapore will be able to have enough homes to accommodate 6.9 million people.
This was what the chief executive of property firm Century 21 Singapore Ku Swee Yong wrote in a commentary in the Today newspaper today.
"It should be clear by now that the residential property segment is heavily oversupplied," Mr Ku said.
"(However), many property market participants remain in denial about the housing oversupply situation, with investors and real estate agents hoping that the outlook will improve while they ignore the growing difficulties in securing tenants amid stiff competition among landlords."
Mr Ku quoted Urban Redevelopment Authority (URA) data as showing that "Vacancies of private homes at 7.1 per cent equate to more than 21,000 empty units at the end of last September."
"Meanwhile, the stock of vacant Executive Condominiums (ECs) rose sharply to 2,375 units, or 16.2 per cent, at the end of September from 1,634 units, or 12.2 per cent at the end of June. And more homes are being built, putting further pressure on the market.
"We can expect a total residential supply of 150,689 units within three years and possibly another 35,000 units in 2018."
However, Mr Ku also said that "Those who deny there is an oversupply of homes point to the Population White Paper published in January 2013 that outlined Singapore’s plans to allow for the population to increase to 6.9 million by 2030."
"In the same paper, it was stated that “sufficient land has been set aside for an additional 700,000 homes from today, and more in the longer term if there is a need”.
"This implies that over the 17-year period from 2013 to 2030, we can expect population growth of 94,000 and an increase of 41,000 residential units per year on average.
"So those hopeful investors and property agents hold the opinion that while there may be some oversupply in the next few years, the excess supply will be small."
But Mr Ku does not agree.
"In my opinion, the forecast number of housing units is overestimated — and by a large margin. An increase of 94,000 in the population per year does not require an increase of 41,000 housing units, or about 2.3 persons per residential unit."
Mr Ku said that this is because "New population growth in the categories of “Dependants of Citizens/PRs/Work Pass Holders”, “Work Permit Holders” and “Foreign Domestic Workers” (which together take up 74 per cent of our non-resident population) does not take up significant additional housing units as the majority have their accommodation provided for by their employers at home or in workers’ dormitories."
Also, "New foreign students in Singapore (accounting for 6 per cent of non-residents) often choose to stay in hostels."
Mr Ku then pointed to historical trend to explain the over-building in Singapore.
"During the last decade, Singapore’s population growth averaged 130,000 per year, with the peak increase of 251,000 in 2008.
"We managed to accommodate 1.3 million more people with an additional 151,475 residential units — or about one additional housing unit per 8.6 new persons in Singapore.
"This means that the 150,689 units that are expected to be completed from now to 2017 can accommodate another 1.3 million population growth."
Mr Ku thus projects that the homes that are being built now will already be able to cater for a 6.9 million population by 2018.
"Singapore’s population was about 5.4 million at the end of last June. Taken together, it means that if we simply allowed the current residential projects in the pipeline to be completed, we can already accommodate a population of 6.7 million.
"And if we take into account the current vacancy of 23,375 private residential and EC units (as at end-September last year), we can just about accommodate the 6.9 million planned for 2030."
If this is so, this would mean that the government has been selling off too much land over the past few years to build too many residential units.
In addition, if the government has done similar projections as Mr Ku has, then this should mean that the government knows that it is releasing too much land and over-building.
If so, is the government allowing residential units to be built just for speculation since there is no real need for them?
Where Mr Ku calls out property market participants for being in denial, it seems that he is also referring to the government.
Yet, if the government knows of the oversupply of residential units but has continued to over-supply on the land, this could mean that even though the government had announced that it plans to have 6.9 million people in Singapore by 2030, backend however, the government could actually be planning to hit this target much earlier.
Moreover, when looking at the projections for the next two years, even though demand for private property is already declining, where there will be another 20,824 private residential units that will be completed this year and an even more 23,459 units completed next year, the scale of the problem is big.
It is likely that the vacancy rate will continue to spike.
The only way that the government will be able to sell off the excess stock would be to allow for 6.9 million in Singapore by 2018.
Is this going to be the government's plan? Moreover, where transportation and healthcare infrastructure, among others, have not yet caught up and are are over-utilised, it looks like Singapore has a massive infrastructural and overpopulation issue on our hands.
Post date:
16 Jan 2015 - 3:54pm
There is an oversupply of homes in Singapore but if we allow the homes already planned to be built to be completed, Singapore will be able to have enough homes to accommodate 6.9 million people.
This was what the chief executive of property firm Century 21 Singapore Ku Swee Yong wrote in a commentary in the Today newspaper today.
"It should be clear by now that the residential property segment is heavily oversupplied," Mr Ku said.
"(However), many property market participants remain in denial about the housing oversupply situation, with investors and real estate agents hoping that the outlook will improve while they ignore the growing difficulties in securing tenants amid stiff competition among landlords."
Mr Ku quoted Urban Redevelopment Authority (URA) data as showing that "Vacancies of private homes at 7.1 per cent equate to more than 21,000 empty units at the end of last September."
"Meanwhile, the stock of vacant Executive Condominiums (ECs) rose sharply to 2,375 units, or 16.2 per cent, at the end of September from 1,634 units, or 12.2 per cent at the end of June. And more homes are being built, putting further pressure on the market.
"We can expect a total residential supply of 150,689 units within three years and possibly another 35,000 units in 2018."
However, Mr Ku also said that "Those who deny there is an oversupply of homes point to the Population White Paper published in January 2013 that outlined Singapore’s plans to allow for the population to increase to 6.9 million by 2030."
"In the same paper, it was stated that “sufficient land has been set aside for an additional 700,000 homes from today, and more in the longer term if there is a need”.
"This implies that over the 17-year period from 2013 to 2030, we can expect population growth of 94,000 and an increase of 41,000 residential units per year on average.
"So those hopeful investors and property agents hold the opinion that while there may be some oversupply in the next few years, the excess supply will be small."
But Mr Ku does not agree.
"In my opinion, the forecast number of housing units is overestimated — and by a large margin. An increase of 94,000 in the population per year does not require an increase of 41,000 housing units, or about 2.3 persons per residential unit."
Mr Ku said that this is because "New population growth in the categories of “Dependants of Citizens/PRs/Work Pass Holders”, “Work Permit Holders” and “Foreign Domestic Workers” (which together take up 74 per cent of our non-resident population) does not take up significant additional housing units as the majority have their accommodation provided for by their employers at home or in workers’ dormitories."
Also, "New foreign students in Singapore (accounting for 6 per cent of non-residents) often choose to stay in hostels."
Mr Ku then pointed to historical trend to explain the over-building in Singapore.
"During the last decade, Singapore’s population growth averaged 130,000 per year, with the peak increase of 251,000 in 2008.
"We managed to accommodate 1.3 million more people with an additional 151,475 residential units — or about one additional housing unit per 8.6 new persons in Singapore.
"This means that the 150,689 units that are expected to be completed from now to 2017 can accommodate another 1.3 million population growth."
Mr Ku thus projects that the homes that are being built now will already be able to cater for a 6.9 million population by 2018.
"Singapore’s population was about 5.4 million at the end of last June. Taken together, it means that if we simply allowed the current residential projects in the pipeline to be completed, we can already accommodate a population of 6.7 million.
"And if we take into account the current vacancy of 23,375 private residential and EC units (as at end-September last year), we can just about accommodate the 6.9 million planned for 2030."
If this is so, this would mean that the government has been selling off too much land over the past few years to build too many residential units.
In addition, if the government has done similar projections as Mr Ku has, then this should mean that the government knows that it is releasing too much land and over-building.
If so, is the government allowing residential units to be built just for speculation since there is no real need for them?
Where Mr Ku calls out property market participants for being in denial, it seems that he is also referring to the government.
Yet, if the government knows of the oversupply of residential units but has continued to over-supply on the land, this could mean that even though the government had announced that it plans to have 6.9 million people in Singapore by 2030, backend however, the government could actually be planning to hit this target much earlier.
Moreover, when looking at the projections for the next two years, even though demand for private property is already declining, where there will be another 20,824 private residential units that will be completed this year and an even more 23,459 units completed next year, the scale of the problem is big.
It is likely that the vacancy rate will continue to spike.
The only way that the government will be able to sell off the excess stock would be to allow for 6.9 million in Singapore by 2018.
Is this going to be the government's plan? Moreover, where transportation and healthcare infrastructure, among others, have not yet caught up and are are over-utilised, it looks like Singapore has a massive infrastructural and overpopulation issue on our hands.
PAP has already screwed up the management of the country at 5.4m; i question their ability to manage a population of 6.9m. 
