Supply of new flats not sustainable: Khaw

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http://www.todayonline.com/singapore/ramp-supply-new-flats-not-sustainable-khaw

Some 52,000 Build-to-Order (BTO) flats were launched in 2011 and 2012, as the HDB sought to satisfy the backlog of demand from first- and second-time home buyers. This year, another 25,000 BTO flats will be offered for sale.

National Development Minister Mr Khaw Boon Wan said: “Don’t expect this 25,000 units per year or the construction ramped-up programme to continue forever. It can’t be. It is not sustainable, bearing in mind that new family formation is only at 15,000 a year.”

While he felt a small number of excess units in public housing would allow the Government to respond to groups who may need flats urgently, Mr Khaw said the ramp-up in recent years has to be reviewed “at some stage”.

Mr Khaw said he was mindful of an “artificial glut” in the private housing market. Given that a large part of demand for private housing is driven by investors looking to rent out units, he noted that an over-supply could affect the rental market.

“If they cannot get tenants and if they find that market dries up, the rental yields will go down south very quickly and all their calculations will go haywire. And if they invest based on a private loan, they may get into serious financial trouble,” said the National Development Minister.