THE TEMASEK TIMES

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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.

 

8 Responses to “WIng Tai boss warns of oversupply of properties in the future”

  1. Lim said

    PM is busy telling us why we can’t be like Nordic countries with high taxes and full welfare. But here we have high taxes (direct and indirect) but limited welfare- worse! double whammy. High growth brings strains and stresses but the govt does not seem to be able to handle the stress and strains which affect us badly. Wages go up but stagnate for the lower income. Public Housing is one prime example of biggest flop and the latest news is it went up 2% in two months! Crumbling public transport is another.

    • Wmulew said

      Where does Ur idea of indirect taxes comes from. And before U start shooting off CPF, CPF is not a tax it is a forced savings and on top of which can be used for investment or purchase houses. Tax in any country in the world goes directly to the government, tax payers have no way to touch it at all. The only other possible tax that may affect U is COE. Then again. if you find that expensive U have a choice not to pay for it, it’s call taking public transport. Wages is stagnate for the lower income, that’s 10% of the population, everyone else is enjoying life while in Ang Moh land we’re talking about lose to 10% unemployment in some countries. Housing prices takes time to adjust U do not want them to drop suddenly because when that happens A LOT OF HOME OWNERS will see their savings go down the drain.

      • Ryan said

        Lim may need to choose his facts more wisely. Wmulew you do present some discerning points but I do have a bone to pick with a few.

        Stagnation of lower income is not the only problem. Growth in median wage hasn’t been able to catch up with rising inflation and prices so I don’t see how “everyone” else is enjoying the good life.

        Yes you are right Singaporeans enjoy one of the lowest tax rates in the world and that is inclusive of the mentioned “indirect taxes”. As with a low tax rate, the trade off is obviously less social welfare. But consider the influx of foreigners pressing down wages (maybe even taking jobs Singaporeans want to do), lifestyle and leisure, slow median wage growth, I think the boon of lower tax rates isn’t really a benefit but more of a cushion to the impending pain and suffering.

        I’m not going to bring any other countries into context because most of the time it’s really a case of apples and oranges. But with regard to our unemployment rate being kept low, one must take a look at what constitutes “unemployment” and what % of it consists of citizens. In fact I believe about 60-70% of jobs created went to non-citizens (yes PRs are not citizens). Do correct me if I’m wrong.

        Not that Singapore is an absolutely horrid place to live in. I love it, it’s my home but it’s definitely not cushy either and definitely no where even remotely close to Goh’s little dream of a Swiss standard of living. I’m not even going to talk about the high inflation rates and the laughably low i/r rates. A lot of people are still happily leaving their money in banks thinking it, along with CPF payouts will be enough for retirement. Erosion check please!

  2. cc chia said

    The property bubble in Singapore will burst one day, just like in many other countries. We are not immune to such an occurence, and it is just a matter of time when it happens.

  3. P Koh said

    Fully agree Lim’s observation. What goes up must come down. It is just a matter of timing. Remember those foreigners who got into the property market before the present unabated rise, when the return is good (100%) do you not think that they would not want to liquidate and return to their own countries where the cost of living is so much lower and they can enjoy a more comfortable livelihood. The Kia Su factor and the fear of losing out in the mad rush to buy property may not hold for too long. The relentless sale of property sites have created much activities in recent times and when in the next year or two these new completed projects come on stream, will there still be good demands for them.
    The share markets around the world are shakened by uncertainty while the Euro Crisis never seem to be able to recover despite the many failed attempts to resuscitate it and where and when will this matter come to rest. All attempts on austerity measures have been met by protests by the masses while taxes due from those who evaded them continue to dodge the system, so where does this lead these insolvent countries to. These PIGS (Portugal Italy Greece Spain) must take fiem actions however painful or unpopular that these may be, or it will be a never ending sad story.
    My bet is that a major correction for equites and property prices will come sooner than later given the above unfavourable sightings.

  4. Why worry about prices going up or down, if one can afford buy, cannot afford don’t buy. Unless ONE wanted to speculate and caused the lower income to be deprived of owning housing unit, but if ONE is self ocuppied why worry. This have got nothing to do with overbuilt, SIMILARLY IF ONE IS WORRIED ABOUT OVERBUILT DON’T BUILT.

  5. Stone said

    What’s wrong with oversupplying of properties? It is definitely better than having shortages and a decrease in price of properties is definitely beneficial for the future generation. With price nowadays, one can hardly imagine owning a decent HDB flat in a prime area. Furthermore, a decrease in price will ease the inequality problems. Properties that are likely to be affected are those that have been priced too high due to speculation(unlikely to be owned by the poor). In addition, should one’s property suffer a decrease in price, other properties will also experience the same and one can easily upgrade his property as a result of an overall fall in the prices. Oversupplying will not be a big problem unless one is speculating and these people deserved it.

    • CKMPD said

      Is Cheng trying to talk down the share price of Wing Tai so that he take the counter private at a cheap price later?

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