IS428 2016-17 Term1 Assign1 Lim Hui Ting

Abstract

In recent years, there is a growing concern of oversupply of residential property in Singapore which many speculate that it could be due to the cooling measures in place that led to a sharp fall in demand for private residential property amid hefty supply. Thus, this assignment aims to analyse the private residential property market in Singapore by looking at the supply and prices of these properties in 2015 and provide recommendations to the current housing policies for 2016.

Our analysis shows that the current private residential property market is not stable enough for the cooling measures to be lifted off due to an increasing trend of speculative buying in the Condominium market. However, the possibly oversupply of Condominium in the market may requires necessary adjustments to the current housing policies before a downward spiral of Condominium prices occur.

Problem and Motivation

An article from TODAY newspaper in 2015 states that the current housing supply in Singapore will be able to meet the demand up till 2030. The article highlights a growing concern of the oversupply of residential property in Singapore (Ku, 2015). This could possibly due to the cooling measures in place since 2009 in order to alleviate the overheated housing marketing in Singapore. Mr Augustine Tan, president of the Real Estate Developers' Association of Singapore (REDAS), said the successive introduction of the measures since 2009 had led to a sharp fall in demand for private residential property amid hefty supply (Goh, 2016).

There are ongoing debates on whether the cooling measures should be lifted. Analysts are speculating that some property cooling measures might be relaxed in 2016 due to consecutive quarters of decline in the housing price index (Kay Hian, 2016). On the other hand, a news article from Straits Times states that the cooling measures are unlikely to be eased or adjusted in 2016 as the interest rates are likely to remain low and investors continue to look into the real estate market for higher returns and low risks investments.

Thus, it is important for us to analyse the current private residential properties situation in Singapore by looking at the supply and price in order to determine if there are indeed an oversupply of housing in Singapore and whether the current cooling measures should be lifted.