According to the Housing and Development Board (HDB) in Singapore, there will be less Build to Order (BTO) new homes coming next year in 2014. This is in response to less requirements from Singaporeans according to the statistics shown.
New homes demand decreases
However, the HDB will reduce construction of new homes step by step to prevent a knee jerk reaction to the reduced supply. The HDB has respond that for the past 3 years, the massive build up of HDB Singapore new homes has begun to restore the balance in the housing market. This was the response by Minister for National Development Khaw Boon Wan as he released the largest BTO exercise last month which have come to a close.
Last month’s launch of Singapore new homes is the largest till date with 8,262 units launched. The HDB has note that for year 2013 alone, more than 25,000 new homes were released to sale to the public and 77,000 new homes were released this year.
Also, the government notes that the cash over valuation (COV) for resale properties in Singapore has dropped in the past 3 months which suggested that the demand for housing has eased. COV has been decreasing for the past year due to interest in new homes and the median COV was $12,000 in October. It was also noted that there is an increase in the number of homes sold below valuation. Below valuation homes is uncommon in 2012 and earlier which suggested that demand for new HDB as well as new condos are met.
Another clear sign which housing demand for new homes are met is the number of BTO applicants per unit. The number of new homes has fallen from a high of 5.3 in 2010 to a low of 2.9 this year.