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Published December 14, 2006

Demand for 7,500-15,000 additional homes a year?
That could be scenario if S'pore population rises 1m over next 10 years


(SINGAPORE) There could be additional demand for 7,500 to 15,000 homes a year - most of them private - if the population of Singapore increases by one million over the next 10 years, according to figures worked out by a veteran property consultant.

The calculations, by Jones Lang La Salle managing director (Singapore and SE Asia) Chris Fossick, are based on the bulk of the increase in population coming from immigration. Assuming that the average household is made up of three people, this translates to about 300,000 to 330,000 new households.

If about 25 to 50 per cent of them buy homes to live in, this would bring additional demand for about 7,500 to 15,000 new homes a year. The figure comes on top of current housing demand - estimated by JLL at about 8,300 to 8,800 private homes for this year.

The new homes needed will come from a diversified base - not just high-end homes in prime and central districts but also in other segments like city fringe and the mass market, suggests JLL head of research (South-east Asia) Chua Yang Liang.

Mr Fossick predicts that foreigners will continue to support the growth in the high-end market. Foreigners have bought 1,348 private homes in the traditional prime districts of 9, 10 and 11 in the first nine months of this year, just 10 per cent shy of the 1,496 homes bought by foreigners in the whole of 2005.

JLL says that average capital values for luxury homes in districts 9, 10 and 11 rose about 23.3 per cent in the first nine months of this year (from end-2005 levels) to $1,662 psf - above the Q2 1996 peak of $1,603 psf. The firm expects capital values to rise a further 5 to 7 per cent by the end of the year, followed by a further 10 to 13 per cent increase next year.

The central districts - districts 1 to 4, which include locations like Marina Bay and Sentosa Cove - have also been drawing foreign buyers. They purchased 325 homes in these locations in the first nine months, after buying 416 such homes for the whole of 2005.

Since the start of the year, US and Indian buyers have been increasing their share of foreign home purchases in central districts, while the share by Australian, mainland Chinese and UK buyers is declining.

Dr Chua estimates that prices of mass-market private homes will edge up barely above inflation for this year and next year.