HDB: Oversupply again by next GE?

In Property on 19/11/2011 at 6:40 am

The housing market in Singapore is heading for a prolonged downturn and overall private home prices are forecast to fall between 22 and 26%  in the next three years, Daiwa Research said. “We believe the residential property market could remain depressed for several years, triggered initially by a likely forthcoming gross domestic product slowdown (in 2012) and lingering global economic uncertainty.” (If you think this is bad, Barclays predicts a 45% decline in HK.)

Daiwa downgraded its view of Singapore’s property sector to “Negative” from “Neutral”, adding that “it is hard for us to see the developer shares outperforming the Straits Times Index over the next six months” despite their underperformance in the year to date.

From late next year, Daiwa said, structural issues such as the rapid build-up in unsold inventory in the primary market and vacant rental units will take centre stage and keep home prices and rents in check for several years. The mass-market segment will hold up slightly better than high-end properties, supported by better affordability and the resilience in the resale prices of HDB flats.

Err what happens if because of

— less FTS,

— slower economic growth or even a recession, and

— Khaw’s promise to build, build,

kiasu young S’poreans decide not to take up the HDB flats that are being built because they think prices will tank?

Remember that Mah overbuilt by more than 150,000 units in 2003, and was beaten up by the Opposition and netizens. For housing, the simple answer was the electorate demanded it, if you could recall the daily outcry in 2001 – 2003 by the opposition as well as members of publc on wastage of public funds on the more than 150,000 units left empty:  ajohor, a poster, on my blog pointed out recently.

(BTW can you blame him for then being super cautious and getting a reputation as the man who made public housing prices go up in a recession? No can win. But he got millions in the bank to console him, so no need to cry for him.)

Final tots. If there is an overhang of HDB flats, what will the Opposition and netizens then say? And how will the voters vote? For or against PAP? Hmm maybe PM deserves his global benchmark breaking salary? Salary review committee pls note.

  1. There will never be an oversupply of HDB flats as predicted, private houses maybe anyway it is a good move by the Authorities to curb speculations and to bring down the prices of HDB.

  2. Just by the merits of a severe downturn may be sufficient to cool the market; companies cut their head count and many of these FTs will have to go? (Just a thought, which group will the companies cut first? Citizens who generally have higher salary or FTs?)

  3. ng yian ping, last checked hdb prices have not come down and is still rising. you ought to read the 154th media in greater detail.

  4. Don’t worry, Cow can & will stop all BTOs overnight if there is recession. Same as he can suddenly announce 25,000/year BTOs overnight.

    Horse didn’t build many HDB when he was MND minister — he mostly inherited it from overbuilding during the 1990s and compounded by perfect storm of AFC, dotcom, 911, Enron, Worldcom, Aurther Anderson, SARS. But he was scarred by predecessor’s example and he developed pathological fear of building even after excess HDB stock cleared by 2005.

    No worries for PAP, they will win in GE2016. Property price go up or stay the same, people will be scared that prices will go down and will vote PAP.
    Property price go down, people will be scared opposition will lagi turn estates into slums and make things worse, and will vote for PAP to turn around the property market. Either way PAP wins.

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