Reactions to HDB scaling back supply of new flats

The government has said it will be scaling back the supply of new flats in 2014.

This year, the HDB launched over 25,000 Build-To-Order (BTO) flats.

One property analyst expects BTO flats to be reduced by between 30 and 50 per cent next year.

Jeffrey Hong, CEO of GPS Alliance, said “(A gradual) 30 to 50 per cent reduction should be sufficient to test the market from quarter to quarter basis.

“And if you reduce, you reduce certain segment of the market gradually. For example, in my opinion, they may start to reduce the five-room flats first.”

Meanwhile, Christine Li, head of research and consultancy at OrangeTee, expects the supply of new flats to take a cue from marriage rates.

The number of marriages in Singapore has been hovering around 27,000 for the past two years.

However, not all newly married couples will choose a BTO flat.

She explained: “If you look at the marriage rates and the number of BTOs, it seems that the government is supplying almost one brand new HDB flat to one married couple. I think this rate is not sustainable.

“Going forward, the government will definitely taper down to a more sustainable level to ensure the stability of the housing market.”

Source : Channel NewsAsia – 3 Dec 2013

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