In case you missed this article, this is a great explanation of the current housing imbalance of demand & supply right now.
Which is also a reason why prices will remain stubbornly high and will no longer return to pre covid 2019 prices.
Even though the Gov annouces that HDB is prepared to launch up to 100,000 hdb flats from 2021 to 2025, there is till now a lack of clear numbers given.
If they were to confirm release 100,000 HDBs, that will be 20,000 per year for year 2021 to 2025, it is still lower than the 23,000 per year when Minister Khaw took charge in year 2013 to 2015.
The HDB market is experiencing a severe demand supply imbalance. We are seeing a super high BTO application rates yet the Gov is tackling by curbing demand but not addressing the supply side issue.
HDB resale prices have risen by 2.3% in the 4th quarter of 2022, and 10.4% for the whole year, marking another year of double-digit price increases. In the last three years, HDB resale prices have risen by 31%.
Assuming an average 5room flat that costs $600k now in year 2023, 10% growth per year will mean that the average price of a 5rm flat will cross $1m in 6-8years down the road.
The same situation is happening on the rental market with rents rose by 7.4% in the most recent quarter, up 30% in one year, and 42% over the last three years.
A recent article also mentioned about “German firms in S’pore see ‘psychological distress’ among staff from rising rents”
Our Private residential vacancy rates are hovering near historical lows at 5.5% in the 4th quarter of 2022.
Besides, the Gov is motivated to quickly open up and increase the business activities in Singapore, the net immigration growth will only add more stress onto an existing severely supply shortage.
Based on the policies that I’ve understood so far, the Gov is refraining from making a drastic measure to overflood the market with too many units and then face an oversupply situation when the economy starts to shift.
I think that the housing forms an important pillar not just for the economy but also for the overall social compact of the society.
If the Gov cannot deliver its promise of affordable homes for the masses, I’m sure educated citizens will start to realize and sentiment will shift.