Sunday, May 18, 2008
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Regional economist Leong Wai Ho of Barclays expects rentals to fall by 5 per cent this year, with a more severe price correction beginning from next year. His justification: Rising vacancy rate. Official data from URA shows that vacancy rate has risen to 6.3 per cent in the first quarter of this year. Mr Leong said: "The vacancy rises are not strong this year, but it will be exceptional next year due to the huge supply hitting the market." Almost 13,000 new homes could be completed next year, rising to 18,000 the year after. All this, at a time when the global economy is slowing.
Some Smart Buyers at this Singapore Property Forum thread have been reporting that rental units are taking much longer time to lease since quarter 1 of 2008.
Here is one such anecdotal evidence provided by a Smart Buyer:
"Personally, I'm observing more "FOR RENT" banners hanging on condos and they are there for a longer time."
Another Smart Buyer predicted:
"High rental comes partly from foreigners, but mainly from 2006-2007 enblokers. If these two factors disappear more or less in the property market, I believe rental will come down. Then follow by property price."
TODAY carried the headline:
Rental rate to fall 25%: Bank - 17 May 2008
The newspaper reported that Barclays Capital's forecast that Singapore rental housing market has peaked, and rent is expected to fall 5% this year and could fall by as much as 25 per cent by 2010.
Singapore Rental to fall 25%?
Barclays Capital's ForecastRegional economist Leong Wai Ho of Barclays expects rentals to fall by 5 per cent this year, with a more severe price correction beginning from next year. His justification: Rising vacancy rate. Official data from URA shows that vacancy rate has risen to 6.3 per cent in the first quarter of this year. Mr Leong said: "The vacancy rises are not strong this year, but it will be exceptional next year due to the huge supply hitting the market." Almost 13,000 new homes could be completed next year, rising to 18,000 the year after. All this, at a time when the global economy is slowing.
Some Smart Buyers at this Singapore Property Forum thread have been reporting that rental units are taking much longer time to lease since quarter 1 of 2008.
Here is one such anecdotal evidence provided by a Smart Buyer:
"Personally, I'm observing more "FOR RENT" banners hanging on condos and they are there for a longer time."
Another Smart Buyer predicted:
"High rental comes partly from foreigners, but mainly from 2006-2007 enblokers. If these two factors disappear more or less in the property market, I believe rental will come down. Then follow by property price."
TODAY carried the headline:
Rental rate to fall 25%: Bank - 17 May 2008
The newspaper reported that Barclays Capital's forecast that Singapore rental housing market has peaked, and rent is expected to fall 5% this year and could fall by as much as 25 per cent by 2010.
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2 comments:
Look like we'll be seeing a repeat broadcast of the 1998 property market crash next year.
The drastic drop in sales, one may argue, is due to market sentiment or herd instinct. But increase in vacancy rate has to be caused by the fundamentals of demand and supply.
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