The number of private residential units available for sale is expected to at least double in the next one to two years, National Development Minister Lawrence Wong said at a dinner gathering of developers yesterday.
A large portion of the supply will come from the redevelopment of projects sold en bloc, on top of that coming from the ongoing Government Land Sales (GLS) programme. With more than enough supply to meet housing demand, Mr Wong urged buyers to do their homework before making a purchase.
To drive home his point, he noted that the vacancy rate for private residential units has been at above 8 per cent for almost two years. The last time vacancies were at such elevated levels was more than 10 years ago, in 2005.
"What this means is that, in terms of actual physical units, there are currently more than 30,000 vacant private housing units - all still looking for occupants," he said.
"This is more than the total number of dwelling units in the whole of Bishan today."
Mr Wong was speaking at the 58th anniversary dinner of the Real Estate Developers' Association of Singapore (Redas), where he again sounded a word of caution to developers on the risk of over-aggressive land bids.
He reminded them as well of the need to deliver properties of good workmanship, and hinted at possible actions against those who compromise on quality.
Mr Wong said that with land prices being high and a requirement for developers to complete the sale of a project within five years of the site being awarded or incur additional stamp duties, profit margins could come under pressure, and developers might be tempted to compromise on construction quality.
While the vast majority of developers are too responsible to do this, the Government has received feedback from time to time about some which do not meet expected quality standards, he said, adding that he had asked the Urban Redevelopment Authority and Building and Construction Authority to step up their checks.
For developers with a poor track record, the Government will consider further measures to hold them to higher standards of accountability, for instance, by making it a condition of their licence that they obtain Quality Mark certification for their projects.
The Government may even disallow these developers from launching units for sale until it is certain that they are committed to meeting acceptable standards, though he also gave an assurance that in working out these tighter regulatory measures, the Government is mindful not to add to overall regulatory costs.
Mr Wong said the Government strives to strike a balance between monitoring the property market with vigilance, while acknowledging there will be ups and downs in it. "As far as possible, we make use of the various levers we have to achieve a more stable and sustainable property market," he added.
Regarding developers' bidding behaviour, Mr Wong said last week in Parliament that higher land bids may not translate to higher selling prices when a project is launched as these are ultimately subject to market demand and supply forces.
Redas president Augustine Tan had a nuanced view of developers' bidding behaviour. He noted that in the purchase of sites from the GLS programme or private collective sites, the market has seen "different risk appetites of developers who had different views on how supply and demand would pan out".
Correction note: An earlier version of the article wrongly attributed a quote to Mr Lawrence Wong. We are sorry for the error.