Tag Archives: Private Residential home

Vacancy may rise to 10%; govt should intervene

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.


Increased share of foreign homebuyers

The proportion of foreign homebuyers, comprising Permanent Residents (PRs) and non-PRs (NPRs), increased from 22.9 per cent in Q2 2014 to 27.7 per cent in Q3 2014, according to Knight Frank’s latest Research Bulletin for the Residential sector.

The increase comes after a quarter-on-quarter decline in Q2.

“This rise in home-buying interest could signal that foreigners are beginning to adapt and adjust to the higher cost of foreign ownership of homes in Singapore. Such increased cost is a result of several property cooling measures implemented over the last few years to dampen foreign demand and curb speculation in the private residential market,” said Tan Tee Khoon, Executive Director, Residential Services at Knight Frank Singapore.

Foreign buyer interest was particularly strong in District 23 which recorded the largest number of home purchases by foreign buyers in Q3 2014.

The quarterly increase in the proportion of PR and NPR homebuyers for this district (which includes Hillview, Dairy Farm, Choa Chu Kang) was also the largest, rising from 5.5 per cent in Q2 2014 to 8.8 per cent in Q3 2014.

There were a total of 717 foreign homebuyer transactions throughout the country in the third quarter, and about 17.3 percent were in the prime residential Districts 9, 10 and 11, marking an increase from the 14 percent recorded in Q2 2014.

Foreign homebuyer transactions formed 36.3 percent, 34.5 percent, and 20.2 percent of total transactions in Districts 9, 10, and 11 respectively in Q3 2014.

According to Knight Frank, the rise in the ration of foreign buyers from July to September reflects foreigners’ interest to invest and live in Singapore. Tan added, “Such foreign home-buying interest is expected to rise further as Singapore continues to establish itself as a global city with stable economic fundamentals and a conducive living environment.”