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Demand for housing in Singapore – is it sustainable?

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Demand for housing in Singapore – is it sustainable? - Singapore - property demand

One of the local media reporters recently asked me if I thought that the demand for housing in Singapore was sustainable. What prompted her question was the fact that the government seems to be launching wave after wave of BTO flats as well as land parcels for private residential development. As a potential home owner herself, she wondered if there would eventually be an oversupply of residential properties in Singapore. In this article, I shall look at sustainability from two perspectives – one is demand for homes and the other is from the angle of price.

Is there actual demand – the “6 million” question

In one of the recent interviews, Singapore’s Prime Minister, Mr Lee Hsien Loong was asked what he thought the target population for Singapore should be, to which he replied, “six million or so should not be a problem”.

At present, Singapore’s population is just over  five million. To accommodate the increase in population of about one more million residents or so, dwelling units (which includes HDB flat and private properties) would be needed. So exactly how many more dwelling units are needed?

According to the Department of Statistics the average household size in 2011 is 3.5. If this trend remains unchanged, to support a population of  six million, the number of dwelling units needed is about 1.71 million in total.

Based on URA, the total number of available private properties in 2012Q2 is 273,050. In terms of public flats, accordingly to HDB’s latest annual report, the total number of flats under HDB’s management is 901,971 (as of 31 Mar 2011). Collectively, the total number of dwelling units works out to be about 1.18 million.


Disclaimer: The information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of Estates Report and/or its partners.