Analysts warn of a supply surge in 2021.
This chart from Maybank Kim Eng shows that 5,500 units sold for redevelopment since 2017 are likely to re-emerge as 20,000 units, intensifying redevelopment by 3.7x.
These 5,500 units came from Singapore's en bloc sale fever. Collectively, these units are worth $14.6b.
Whilst the impending demolition of en bloc sites will lead to a small supply of private homes in 2018 to 2019, Maybank KE noted that a word of caution has to be said about a supply build-up in 2021. "As developers are not allowed to landbank under the current regime, most projects are likely to be completed within four to five years of land acquisition," it added.
Maybank KE analyst Derrick Heng commented, "With enbloc deals since 2017 potentially adding 20,000 units in their new properties, we see private housing supply rising to over 17,000 units in 2021E. As such, we believe the market could focus on potential weakness from late-2020."
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