In an interview with the media over Singapore’s property sales outlook, the head of residential leasing and ad-hoc sales at estate agency Savills Singapore, Jacqueline Wong, revealed that they expect the private housing vacancies in Singapore to hit more than 10% by year end:
“Single-digit vacancies will rise to double-digits by year-end or second quarter next year.”
According to housing statistics, the latest vacancy rate data for Singapore’s private housing is standing at 7.8% as of 2014.
The key reasons behind the increasing vacancies she explained are the increase of the newly completed private housing supply flooding the market and the lowering of private housing leasing demand from the slowdown in hiring of foreign expats, who make up the bulk of private house leasees .
The Urban Redevelopment Authority have also released statistics for private homes’ overall rental index, which has fallen 5.1% within 15 months from Q3 2013 to Q1 2015.
Savills Singapore’s head research Alan Cheong also said that the rental slide for mass-market condos could be even worse:
“Based on recent anecdotal evidence, leases for suburban condo units are being renewed at rental rates around 15 per cent lower than leases two years ago.”
Alan Cheong also said individual landlords are more realistic with their expectations and are more flexible to lower rent as compared to institutional landlords. In the landed property segment, Category A Good Class Bungalows in Holland road which used to fetched S$50,000 a month in 2011/2012 are now only going for S$30,000 a month – a drop of 40%.
Savills Singapore expect rental market to continue falling because the bulk of new home completions are still coming.