As a large supply of new homes are built this year, and as the government tightens foreign labour, experts are predicting that rental transactions for private residential housing in Singapore may decrease by up to 5% this year.
It's estimated that from 2012 to 2016, an average number of about 19,225 private homes will be built per year, a significant increase from the annual average of 9,136 units in the previous decade. These new homes will primarily be in the suburbs. This ramped-up supply may have a direct impact on the rental market, which is already seeing a rise in vacancy rates as the numbers of then on-resident population fall.
In addition, despite 6 rounds of cooling measures, Singapore's home sale and rental prices have remained steadily high, always bouncing back within three months of each cooling measure. This was caused by strong investor interest sparked by low interest rates and low unemployment.
Barring any significant disturbance in the market, experts believe that the high supply may keep private home prices flat or limit its increase to not more than 2% this year. Compared to 2012’sincrease of 2.8%, this is a conservative estimated increase.
It remains to be seen whether the latest round of cooling measures, announced last Friday, would limit the increase in prices even further.
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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