The supply glut won't ease anytime soon.
Developers will have to grapple with an intense oversupply of new homes over the next three years, according to a report by Maybank Kim Eng.
Maybank Kim Eng noted that some 14,900 new private condominiums are expected to enter the market per year until 2018, coupled with a supply of 4,400 executive condominiums per annum. This will be exacerbated by the expected net increase in public housing supply, forecasted at 22,100 home per year until 2018.
"Together with the net increase in executive condominiums (ECs) and public housing, we forecast an annual net increase of 41,400 homes for the next three years. This is double the 21,800 in the past decade," Maybank Kim Eng said.
And en-bloc sales won't rescue developers from this oversupply situation, unlike in 2006 and 2007.
"Today’s dearth of en-bloc deals implies that supply is unlikely to moderate soon. Our public-housing forecasts already incorporate the demolition of 2,600 public units from the
government’s Selective En Bloc Redevelopment Scheme or SERS," said the report.
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