Singapore Property - Supply shortage may get pronounced

According to Business Times, Citigroup, the supply shortage situation may
worsen due to the actual number of units completed likely to fall short of
the Urban Development Authority’s (URA) projection of 42,200 units from
2007 to 2010. The claim is made on the basis that the units under
construction lag completion estimates with only 25,100 to be built from
2007 to 2010 and shortage of construction materials and workers may
add to the delay. We believe that it is unlikely to be the case because the
URA planned estimates does not fully include the supply from the en bloc
transactions in the past twelve months.
Although the en bloc supply can be controlled by the developers by
holding back the launches, we expect more developers to take advantage
of the current bull market and launch the projects soonest possible due
to the rising uncertainties about future price levels and possible
government intervention. Also, historical data from URA on the Expected
and actual units completed indicates that actual units completed since
2004 has exceeded the expected units completed. We are reviewing the
demand supply dynamics in the different segments and the overall
strategy for the residential property sector and will update later.