Kevin Tan
06-10-15, 11:39
http://www.theedgeproperty.com.sg/content/why-property-cooling-measures-should-be-reduced
Why property cooling measures should be reduced
By Paul Ho / URA, Singapore Department of Statistics | October 5, 2015 2:34 PM MYT
Although Singapore runs a surplus almost every election cycle, this surplus excludes land sales. Thus, the city-state runs a much larger “surplus” than reported in the budget. While the International Monetary Fund treats land sales as revenues, Singapore’s Ministry of Finance treats land sales as capital receipts. What this means is that land sales are added to the country’s past reserves as capital gains/losses.
According to URA, from January 2011 to September 2015, commercial, hotel, white, industrial, residential (excluding landed housing) and other sites amounted to some $24 billion in land sales. This figure excluded land sales from HDB for executive condominium (ECs), built-toorder and Design, Build and Sell Scheme sites.
As Singapore maintains a balanced budget, it is puzzling why there is still a need to release so many land parcels, considering that the sales proceeds are not even considered revenues to balance a budget, but are parked away into reserves.
According to URA, there are 64,437 private non-landed units to be completed between 2H2015 and 2019, based on 2Q2015 forecasts. An estimated 11,105 non-landed, 513 landed and 1,573 EC units will be completed in 2H2015.
On the other hand, demand over the past one decade for private non-landed homes averaged only 8,000 units annually, based on the change in occupied stock for non-landed homes. On a separate note, there were around 40,000 unsold units in the pipeline (private and ECs) as at end-2Q2015. If the current trend of 8,000 new sales annually were to continue, we would have five years of supply overhang in the pipeline, even assuming that all land sales are stopped now until 2019. The oversupply would affect 2016 the most where there are 20,381 non-landed units expected to be completed.
From 2005 to 2014, Singapore’s population grew 1.3 million and housing stock rose 171,870 units, indicating that there are 7.58 people per household (see table). This is more than double the average Singaporean’s household size of 3.5 to 3.6, which could be partly because workers either stay in dormitories or rent rooms or domestic helpers stay with their employers.
If we are working on 64,000 units becoming ready in 2H2015 through 2019, that works out to an average of new 15,000 units a year, whereas our current demand trend is 8,000 units. This indicates a possible build-up of unsold units numbering 25,000 to 30,000 in four years’ time, which will add to the already elevated private residential unsold rate.
http://www.theedgeproperty.com.sg/content/why-property-cooling-measures-should-be-reduced
Why property cooling measures should be reduced
By Paul Ho / URA, Singapore Department of Statistics | October 5, 2015 2:34 PM MYT
Although Singapore runs a surplus almost every election cycle, this surplus excludes land sales. Thus, the city-state runs a much larger “surplus” than reported in the budget. While the International Monetary Fund treats land sales as revenues, Singapore’s Ministry of Finance treats land sales as capital receipts. What this means is that land sales are added to the country’s past reserves as capital gains/losses.
According to URA, from January 2011 to September 2015, commercial, hotel, white, industrial, residential (excluding landed housing) and other sites amounted to some $24 billion in land sales. This figure excluded land sales from HDB for executive condominium (ECs), built-toorder and Design, Build and Sell Scheme sites.
As Singapore maintains a balanced budget, it is puzzling why there is still a need to release so many land parcels, considering that the sales proceeds are not even considered revenues to balance a budget, but are parked away into reserves.
According to URA, there are 64,437 private non-landed units to be completed between 2H2015 and 2019, based on 2Q2015 forecasts. An estimated 11,105 non-landed, 513 landed and 1,573 EC units will be completed in 2H2015.
On the other hand, demand over the past one decade for private non-landed homes averaged only 8,000 units annually, based on the change in occupied stock for non-landed homes. On a separate note, there were around 40,000 unsold units in the pipeline (private and ECs) as at end-2Q2015. If the current trend of 8,000 new sales annually were to continue, we would have five years of supply overhang in the pipeline, even assuming that all land sales are stopped now until 2019. The oversupply would affect 2016 the most where there are 20,381 non-landed units expected to be completed.
From 2005 to 2014, Singapore’s population grew 1.3 million and housing stock rose 171,870 units, indicating that there are 7.58 people per household (see table). This is more than double the average Singaporean’s household size of 3.5 to 3.6, which could be partly because workers either stay in dormitories or rent rooms or domestic helpers stay with their employers.
If we are working on 64,000 units becoming ready in 2H2015 through 2019, that works out to an average of new 15,000 units a year, whereas our current demand trend is 8,000 units. This indicates a possible build-up of unsold units numbering 25,000 to 30,000 in four years’ time, which will add to the already elevated private residential unsold rate.
http://www.theedgeproperty.com.sg/content/why-property-cooling-measures-should-be-reduced