William Tan Real Estate

Is there a property ‘oversupply’? Should you buy now or wait?

2019 was a year of project launches. With 60 new projects launched to market (that’s an average of 5 per month),  it is no wonder that buyers are spoiled for choices , leading to many reports that there is an oversupply in the market. 

“Today there is a property oversupply. We will wait for developers to drop the price soon when they can’t sell.” – Buyers

The above seems to be a common comment of buyers when it come to making a decision on their property purchase. And to that, I will agree it was a reasonable assumption. 2019 was a year of window shopping and getting a feel of the market situation, some projects sold very well (e.g. Avenue South, Margaret Ville) while others paled in comparison.

How did all this oversupply began?

If you recall, between the 2017-2018, that was an en-bloc frenzy in the property market. Many older private condominiums and apartments were up for en-bloc sale and they were met by many developers who were in the market snapping land for new developments. THIS is the main reason for the sudden release of new launches in 2019.

But why all the launches at once? (You may ask.)  The reason is that developers have a deadline by the government to launch and sell off their inventory within a time frame  (of 5 years) or they will suffer a penalty fine.

So back to the en-bloc fever, it had given rise to what we saw in 2019, as developers release their new project to market. It is worth noting that many of the property owners who profited from the en-bloc sales are still in the market waiting to find their new ‘replacement’ home.

All En-bloc Sales Sites Will Be Launched by 2020.

We are now in Q1 of 2020, there will likely be about 40 new launches this year but this will be the final burst of what’s left of the 2017-18 en-bloc sale. The new launches will also includes land acquired from GLS.

And so it seems there is indeed an oversupply now. Lot of unsold units! Before you jump into that conclusion, let us take a look at the following analysis. 

The graph below shows launched/sold private residential over the past 10 years period. 2010-2013 was a boom period for property because it was the ‘pre-cooling measures’ period, but in 2013 the government step in with major cooling policy to curb property speculations and that brought down the overall numbers.  This had resulted in a lot of pent-up demand in the market as historical numbers show there are plenty of demand in the market  but they(buyers) are holding back at the moment to wait for the next golden opportunity to enter the market again.

The units launched peaked in 2019 and 2020 at 11,345 and 12,500 units, and do notice the sharp drop in 2021 – only 5970 units will be available.  There will be much fewer project launches in 2021 as the en-bloc launch phase will be over over and the supply and demand will will re-adjust. 

The yearly average private residence sold over the 2010-19 period is 12,134 units, but we can be more conservative and use 9000 units to project the numbers for 2020 & 2021. From this projection, it can be clearly seen that there isn’t going to be as much of an over supply for very long.

  • What the above shows is that future supply of new units will limited.
  • Supply will be depleted by 2021.
  • While developers will not be increasing prices, they will also not likely drop crazy prices given the projected uptake.
  • Good projects will sell healthily. Examples are Avenue South and the recent The M, which sold 70% of its inventory during there launch week.

If we follow basic economic law of supply and demand, we know that prices is lowest when supply is high (present period) and when supply goes now, price definitely head north. 

To further illustrate the application of  the law of supply and demand, the chart below put the Property Price Index alongside the Property Supply in the last 20 years. Clearly, each of the price index spike during period of low supply. Thus waiting for signs of low supply will too late to enter the market.


For the case of Kingsford Waterbay, we look at the price changes of over 1 year period to see how much difference the entry price can make.


A price increase by developer of about $213k on a lower floor unit vs the launch period higher floor unit. When supply runs low, developers have all the ability to raise prices given the high demand.

Above is another example of how the developer easily commands a $208k  increase for an unit one level above when supply runs low.


  • The market talk about the property over supply is short live in contrary to what many are saying.  Projections and future supply forecast has shown that supply will be taken up but 2021.
  • Law of Supply & Demand shows that entering when supply is high is the way to secure a low entry price. 
  • One will only know the market has hit the bottom when prices are starting to rest quickly. Do you want to scramble and enter at that point? ( I think not.)
  • If you are a property investor, keep a lookout now at the new launches and if you find the right unit. Act swiftly and make entry.
  • Those who wait to time the market will often miss the bottom and end up missing the cycle.