This is the biggest threat looming over Singapore residential sector

50,000 supplies will burden industry players.

According to OCBC, one significant headwind for the residential sector ahead lies in the large physical supply expected over FY14-16.

Including HDB, DBSS and EC completions, OCBC anticipates that 50.0k, 49.7k and 73.6k homes will come into the physical supply in FY14, FY15 and FY16, respectively.

Here's more from OCBC:

Assuming a 6.0m population target by 2020 from the latest Population white paper, we forecast average population growth at ~86k individuals per annum from 2014-20.

Assuming a conservative 3 persons per household, this translates to an incremental demand of ~29k physical homes per year, which points to a fairly clear physical oversupply situation ahead.

This being so, we believe that vacancy rates would likely deteriorate from its current 6.1% levels to 6.7% as at end 2014.

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