Empty houses: Is oversupply looming?

Total supply of private homes is said to amount to about 53,000 units.

This approximation from Colliers International includes the supply from the 2H 2011 GLS Programme (14,200), the number of unsold private residential units, and those that could be generated from the recently sold GLS sites.

Ms Chia Siew Chuin, Director of Research & Advisory at Colliers International, said, “Taking into account an average take-up of 9,800 – 12,000 per year seen in the last five to 10 years, this potential supply could take about four to five years to be fully absorbed by the market.”

She noted, “This could be substantial, especially if economic conditions should turn and could affect employment prospects, wages and demand for housing. The risk of interest rates increasing going forward could also temper demand. Furthermore, if immigration policies should tighten further, demand and hence take-up of housing units could also be dampened.”