Property consultant DTZ expects rents of Singapore's private
residential units to fall by up to 5 percent this year compared
with a slight rise in 2012 due to a large oncoming supply of new
flats and slowing population growth.
Singapore's home prices and rents have remained firm despite
government efforts to cool its red hot housing market, buoyed by
strong investor interest as a result of low interest rates and a
tight labour market.
DTZ estimates that around an average of 19,225 private homes
will be completed per year from 2012-2016, sharply higher than
an annual average of 9,136 units in the previous 10 years. The
bulk of the new supply will also be in the suburbs, which will
create more pressure in those areas, the property consultant
"This increase in supply will also be exacerbated by slower
growth in the non-resident population as a result of government
measures to tighten foreign labour. Vacancy rates have already
been rising and as a result of the supply, we expect rents could
fall," said DTZ's associate director of research, Lee Lay Keng.
She expects private home prices to remain flat or rise by up
to 2 percent this year. Based on the government's preliminary
estimates, prices of private homes grew by about 2.8 percent in
"Even with six rounds of cooling measures, purchasers'
demand tends to bounce back after two to three months. Low
interest rates and high employment will continue to support
demand," Lee said at DTZ's property seminar.
As a result, Lee said more government measures could come
that may include restrictions on renting out public housing
units, raising down payments for buyers purchasing their second
or subsequent homes.
Singapore's largest residential developers include
CapitaLand Ltd and City Developments Ltd,
whose shares have outperformed the broader market in 2012.
1348 (0548 GMT)