Vacancy rate of private homes ‘may hit 10%’

SINGAPORE — The vacancy rate of private homes in Singapore could be as high as 10 per cent over the next few years due to a surge in the number of completed units and this will pile further pressure on the residential market, the president of the Real Estate Developers’ Association of Singapore (REDAS) said yesterday.

Mr Chia Boon Kuah, who was speaking at the association’s 55th anniversary dinner, estimated that there will be about 68,000 newly completed units in the next few years.

“The industry is expecting unabated headwinds as the slew of cooling measures continue to bite and dampen buying sentiment ... (Rising vacancies) will add even more pressure on the residential market,” he said.

Data from the Urban Redevelopment Authority (URA) showed that the vacancy rate of private homes was 7 per cent at the end of the third quarter this year. It forecast the number of completed homes in 2015 to 2016 to exceed 20,000 units each year before falling to around 15,000 units in 2017.

Mr Chia also said sales of new private homes are expected to be less than 9,000 units for the whole of this year, down sharply from around 18,000 units last year. Coupled with the incoming supply, the property market faces “significant challenges”, which could have wider implications on the economy.

“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 said.

Private home prices in Singapore fell 0.7 per cent between July and September for a fourth consecutive quarter of decline, narrowing from the 1 per cent decline in the previous quarter, URA data showed. LEE YEN NEE