In a post titled “My Worries” on his blog “Housing Matters”, Minister Khaw Boon Wan expressed his concerns about the current euphoric state of the housing market, and cautioned that “sharp property price increases cannot go on forever.” In this article we’ll take a look at the reasons for his cautious outlook on the market and consider if it makes sense for us to be worried as well.

Reason #1 – The large supply of units under construction and in the pipeline

“35,000 private units (condos and landed properties) have already been sold, though still in construction, with payments in various stages of completion. But there are 45,000 units in the pipeline, waiting to be built and sold.”

Minister Khaw and many property analysts are concerned about the large upcoming supply. DTZ estimates a completion of 32,359 units in 2013-2014 versus the 17,501 units in 2011-2012. If ...