Data from the Urban Redevelopment Authority (URA) showed vacancy rate of private homes stood at seven percent in Q3 2014. It could reach up to 10 percent due to the upcoming supply of 68,000 new units over the next few years, according to Chia Boon Kuah, President of the Real Estate Developers’ Association of Singapore (REDAS) in media reports.
“The industry is expecting unabated headwinds as the slew of cooling measures continue to bite and dampen buying sentiment. The looming supply in the next few years is likely to cause home vacancy rate to head towards 10 percent,” he said during the 55th anniversary of REDAS held last night at The Ritz-Carlton, Millenia hotel.This will add even more pressure on the residential market, he opined.
The URA expects that more than 20,000 new units will enter the market annually from 2015 to 2016, before moderating to about 15,000 units by 2017.
Additionally, new private homes sales are forecasted to plummet from 18,000 units for the whole of 2013 to under 9,000 units by year-end, noted Chia. Combined with the significant stock in the pipeline, the challenges the private housing market is getting greater, and this could affect the economy.
in addition, 20 percent of the adult population here works in the real estate or construction industry, and 25 percent of the top 20 listed firms are involved in this sector.
“It is in no one’s interest to witness unintended outcomes. We, therefore, urge the government to stand ready to take supportive measures to prevent a tipping point should the market turn volatile and worsen further,” he added. However, Chia did not specify what kind of measures the government ought to implement.