Sunday, June 15, 2008

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Fall in Rental Demand with Enbloc Cooling and Supply Increasing

Growth in rental rates could slow

The rental index has performed strongly since the beginning of 2005, rising by 74.3% to date. This was on the back of a declining vacancy rate that fell from 8.8% to 6.3% over the same period and the key contributing factor to this decline was the flurry of enbloc sale tenders that reduced the amount of available properties in the market. However, the cooling down of the enbloc fever will see fewer properties being taken out of the market, which together with an impending supply of an estimated 59,540 units to be completed between 2008 and 2011, we could see vacancy rate increasing over the next few years. And this would lead to a more muted outlook for rental rates amidst a more uncertain economic outlook.

- OCBC Investment Research Report, June 2008

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
Smart Buyers, 10 reasons to wait
Property Price Index Graph Plotter & Online Property Valuation


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