WhyItMatters

Keeping supply of homes steady

Next year, the Housing Board will launch about 17,000 Build-To-Order (BTO) flats in a move to keep a steady supply of new homes.

It is doing so for the third year in a row, following 17,584 units this year and 17,891 last year.

The steady supply will, among other things, meet existing demand as well as help to stabilise the HDB resale market, National Development Minister Lawrence Wong has said.

Property analysts said the supply is also not likely to affect the private property market where the buyers are well-to-do. BTO buyers, on the other hand, are typically young couples getting their first home. But not all of them can wait for such a flat.

Another group that may not want to wait are existing HDB home owners who could not get a bigger BTO flat for their growing family.

For these two groups, the resale HDB market is the main, if not the only, option. But their demand, based on recent years' figures, will have a negligible impact on HDB resale prices, said analysts.

However, a new force next year could exert an upward pressure on HDB resale prices, they added, pointing to buyers seeking a home with their windfall after selling their homes en bloc. Even then, the analysts do not see prices soaring, mainly because the supply of private homes will help soak up some of the demand of these collective sale millionaires.

There are now more than 30,000 vacant private homes. In the next two years, the supply is expected to at least double. It will comprise the following:

•17,178 unsold units with planning approval , most of which would be ready before end-2019.

• About 16,700 units, with the majority coming from the redevelopment of collective sale sites. These are expected to be completed from 2021.

The potential oversupply of private home will help to temper the rise in price of HDB resale flats.

But it is a fine balancing act. Mr Wong said as much when he said the Government would continue to calibrate its flat supply carefully to take into account the stability of the HDB resale market.

Ng Jun Sen

A version of this article appeared in the print edition of The Straits Times on December 22, 2017, with the headline 'Keeping supply of homes steady'. Print Edition | Subscribe