Singapore housing supply to remain tight in the next few years

But home prices are not expected to increase significantly.

Singapore is set to see a tight housing supply over the next few years. According to OrangeTee, housing supply is expected to remain tight over the next few years. 

Flats obtaining their five-year Minimum Occupation Period (MOP) are slated to drop significantly from 31,325 units in 2022 to 15,748 units in 2023, dipping further to 13,093 units in 2024 and 8,234 units in 2025. 

Here’s more from OrangeTee:

Although supply will drop this year, prices are not expected to rise extensively, given the cooling measures and high cost of living. Flats that have obtained MOP last two years will continue to be sold. 

As prices have already hit a record in many areas, there will be some price resistance. Buyers may hesitate to pay too much for a flat as mortgage rates are still climbing. We expect price growth to remain moderate this year in view of the economic uncertainties, cooling measures and rising interest rates.

More BTO flats will be launched this year which will help to mitigate excessive price surges in the secondary market. HDB plans to offer up to 23,000 BTO flats in 2023. 

Therefore, prices of HDB resale flats are expected to grow at a slower pace of 5 to 8 per cent this year. 

The slower pace of price growth may result in a healthy number of deals being sealed as volumes have already climbed back gradually over the past months after cooling measures were implemented in September. 

We estimate that the total sales volume this year may hit around 23,000 to 26,000 units, slightly lower than the 27,896 units sold in 2022, and below the 31,017 units in 2021, but possibly on par with the 23,714 units sold in 2019 and 24,748 units in 2020.