Demand and Supply for Singapore Housing Market

Demand and Supply, are the first principle in economic. So to understand the home price (especially private housing), you need to know the demand. Some one has done a very good analysis, and let me share with you here.

Demand by population growth:

Household size = 3.7 (Source: Census 2000)

Population growth = +99,700/yr (20-year average)

New homes required = 96,7900/3.7 = 26,159 per year

Demand for private homes = 20% of 26,159 = 5,232 units/yr

Demand from HDB upgraders:

Resident population in HDB flats dropped from 86% in 2000 to 81% in 2007; but flattish in 2008 (82%).

Lets assume 0.5 ppt shift = 18,215 people;

Demand from population shift = 18,215/3.7 = 4,923 units/yr

Total demand = 5,232 + 4,923 = 10,155 units

Supply estimates by URA
2009E: 10,448 units
2010E: 5,582 units (under const.) + 1,430 units (planned) = 7,012 units
2011E: 9,492 units (under const.) + 4,194 units (planned) = 13,686 units
2012E: 6,066 units (under const.) + 8,046 units (planned) = 14,112 units

Of course, those supply are "planned", and they are not confirmed. So we may not see any over supply. And many external factors will affect these. So those data are just some information for you when you make your decision.


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