Sim Lian Group Limited has expressed its concern that construction costs may rise, with the latest move to accelerate the rate of public housing supply.
Aiming to remove the demand backlog and help young couples get their flats faster, the recent temporary policy calls for the building of public flats ahead of order.
The Housing and Development Board (HDB) will quicken the construction pace, with plans to provide 25,000 units towards the end of the year, from a previously planned 22,000 units.
Sim Lian noted that expediting the public housing construction pace may increase construction costs, which will affect the companies’ profit margins.
Kuik Sing Beng, Executive Director of Sim Lian Group, sees a polarity in public housing demand in mature and non-mature estates. While he expects a sufficient housing supply to face the demand in the mature estates, “demand for public housing in non-mature estates will diminish.”
“Private developers may face the challenge of timing their project launches and land acquisitions when volatility rises. The higher volatility also translates to a riskier environment for property speculators,” said Liu Jinshu, an investment analyst from SIAS Research.
Mr. Liu also noted that while the additional homes in the works will moderate the increase in housing prices, “future demand has to be forecast when attempting to build ahead.”
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