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Is it a good time to buy?


What MOST people see now are figures of 58,000+ units of supply from 2019-2023.

Hence the poor sentiment. The market is affected by sentiment, which is “feeling” and “fear”

Only those who can see beyond what they can see now, through analysis, will be able to make informed decisions that will help them reap from outperformance in their investments.

Let’s look at the numbers of 58,000+ units.

17,000+ have been sold.


One key point to note, projects completing in 2020/21 were probably launched in 2015-2017.

See the slide above.

Supply in 2018 94% sold

Supply in 2019 88% sold

Supply in 2020 55% sold

Supply in 2021 28% sold.

2021 supply – 1/3 sold within months of a new launch is healthy for a sustainable market.

If new launches are sold out immediately, developers will rush to buy land and drive up land prices, ahead of income growth.

The repercussion will be the huge supply down the road, which may cause the market to crash.

The new launches cluttered in 2019 is the result of the enbloc fever in 2017/18, which is why the government had to step in with the 5th July 2018 cooling measures to prevent a meltdown similar to 2014/15/16.

Going forward, there is a balance of 41,000+ units of supply in the market from 2019-2023. This means an average of 8,000+ units each year.

Average takeup rate was 11,406 from 2007-2018. There is no doubt that the supply can be absorbed.

In fact, there will be a shortage in 2023 and beyond unless the government turns on the tap of GLS as there were only 2 enbloc sales concluded since July 2018.

As it is now, shortage in supply 2019/20 will reduce vacancy rate from current 6.3% to 5.5% by 4Q2019

This will drive up rental rates over the next few quarters. Good news for landlords!!!

Estimated 74 projects (24,567 units) launching this year,  probably completing in 2023/24.

Most people are affected by what they see.

But the key is whether the supply beyond 2023 is under control.

Of course it is!

Invest through analysis, not by feeling.

By the time rental rates go up and supply tightens, it will turn into a seller’s market.

Buy in a buyer’s market like now, not in a seller’s market.

Many analysts expect the take-up rate in 2019 to drop by 20-25%, to around 8,500 units, due to the poor sentiment.

Let’s assume this is going to be the case.

At the end of 2019, what will we see?

1) inventory becomes 32,000 units in 2020-2023.

2) New supply beyond 2023 from GLS and Enbloc.

GLS (2,025 units in 1H2019)

Enbloc (negligible thus far)

With so many cooling measures,  the government can easily manage it to a supply level of 11,500 units (~11,568 is the average supply from 2018-2022 [JLL])

What will the supply look like?

2020-24 (5 years)

• Current inventory at end of  4Q2019: 32,000 (from 2020-23)

• new supply 11,500/ year

32,000 + 11,500 = 43,500

Average supply each year during the 5-year period 2020-24:

43,500/5 = 8,700 units

There will be a shortage compared to demand of 11,406 units!

Furthermore, many newly launched project will have achieved 30%-40% sales.


Developers will have another 3-4 years to sell the balance of 60-70%.

With the supply picture clears up, and more agents are trained to be consultants who can advise the demand/supply equilibrium to their clients, what will happen?

• Good units are gone.

• Early-bird prices are gone.

• Rental yield picks up as vacancy rate drops to 5.5%.

Developer will increase prices as transaction volumes pick up.


Pent-up demand.

As mentioned previously, many analysts expected demand to be 8,500 units instead of average new take up of 11,406 units between 2008-2017.

Now is a good time to pick up new launch units.


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