WIng Tai boss warns of oversupply of properties in the future
Posted by temasektimes on June 9, 2012
Cheng Wai Keung, the boss of construction firm Wing Tai has voiced his concerns at the possibility of oversupply of properties in Singapore in the coming years.
The prices of Singapore properties continue to rise as buyers are choosing to acquire them now, fearing that prices may increase further in come years. However, this may lead to a drop in demand more than expected leading to an oversupply.
“The effects of five rounds of property cooling measures have been short-lived. And despite the fact that the government has increased supply for so many years, the property market has not subsided. This means the pent-up demand is more than I expected,” noted Cheng.
He attributed this to a combination of factors such as past undersupply, population growth and liquidity.
“But my argument is that there is a danger of people bringing forward their demand, so subsequent years’ demand may be lower than what they call average demand every year (based on current demand statistics)…This will create an even bigger supply and demand inequilibrium; it will create an oversupply more than we think,” he added.
The prices of Singapore properties – both public and private have almost doubled in the last five years or so due to the relentless influx of foreigners who are allowed to purchase properties in Singapore with impunity.