Singapore's public housing supply could slow down after 2015

Singapore's National Development Minister Khaw Boon Wan said that the government has been ramping up the supply of public housing flats since 2011, but this could slow down after 2015 to prevent a glut in the market, local media reported on Tuesday.

About 25,000 public housing flats built by the government were launched for sale to local resident households in 2011, followed by 27,000 units in 2012.

The government plans to launch at least 25,000 new flats this year.

Khaw said while the continued ramped-up supply has helped satisfy the backlog of demand from first and second time home buyers, it is not sustainable in the long run.

Nevertheless, Khaw said he is not worried about a "small glut" forming in the public sector as he wants to help more groups, like singles. He said he hopes to build up an inventory such that flats are ready if there is demand.

While he doesn't foresee a glut happening in the next two years, he cautioned the market need to go back to a steady state.

"Don't expect this 25,000 units per year or the construction ramped up program 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," he said. "As we clear the back log, we should be able to move back to the steady state."

"The steady state does not necessarily mean 15,000 units construction per year," he added, saying that some may prefer to buy resale flats so that they can move in immediately and some may want to select which flats to buy and which areas to buy because their parents might not be in the non-mature estates or their parents might not want to move into non-mature estates.

Khaw said he is confident that Housing and Development Board will be able to deliver on the flats it has promised despite the tightening of foreign manpower into Singapore.

About 80 percent of the resident population in Singapore live in public housing units built by the government for sale to the resident households. In principle, one household is allowed to own a unit only at one time.