Singapore’s oversupply of flats could hit property prices, central bank warns

The Monetary Authority of Singapore advised caution, pointing to the rising number of unsold units and weaker labour market

Residential property prices dropped after the government imposed property curbs in July 2018 but have recently started to creep up again

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The waterfront of Singapore’s financial district. Photo: AFP

Published: 5:01pm, 28 Nov 2019Updated: 6:09pm, 28 Nov 2019

An oversupply of flats threatens to lower Singapore’s property prices, the city state’s central bank has warned.

The number of unsold units from new projects doubled to 4,377 in the third quarter, the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review released on Thursday.

The overhang will probably “be exacerbated in the medium term” as developers launch projects from a series of redevelopment or “en bloc” deals struck in the past two years, MAS said.

“The increase in the unsold inventory could place downward pressure on prices in the medium term, if unaccompanied by a corresponding rise in demand,” the report said.

While residential property prices declined after the government imposed a fresh round of property curbs in July 2018, they have recently started to creep up again, gaining 1.3 per cent last quarter.

According to the Urban Redevelopment Authority, there were 50,964 uncompleted private residential units in the pipeline at the end of last quarter, up from 50,674 units in the previous quarter.

An oversupply of flats threatens to lower Singapore’s property prices. Photo: Bloomberg