SINGAPORE: The Republic's real estate developers association (REDAS) has warned of record-high vacancies in the private residential property market, as supply continues to build while tighter mortgage curbs cools demand.
In his welcome speech at a property seminar organised by the association on Tuesday (Jul 14), REDAS' president Augustine Tan cited analysts' estimates that more than 89,000 new private homes will be completed from 2015 to 2019, and that the number excludes supply from the government land sites sold in the first half of the year.
"This looming supply is likely to bring home vacancy rate to a new record high, causing further slip in home rentals and downward spiralling of property prices," Mr Tan said.
Singapore's private home prices have fallen for a sixth consecutive quarter, according to official figures. The next set of quarterly numbers will be released later this month, but flash estimates are already predicting a seventh straight quarter of decline. Developers are also selling fewer units – down from 14,948 units in 2013 to just 7,316 units last year.
On the corporate front, Mr Tan said that given the uncertain macroeconomic environment in Europe, tight labour market and modest GDP growth in Singapore, companies’ earnings are expected to soften in the near term.
“According to latest figures by property consultants, the proportion of new office leases in Singapore dropped by half as companies cut costs,” he said.
Amid this, many hope that the Government's macro-prudential policies to rein in asset price inflation will be calibrated over time."
The Far East Organisation’s property sales executive director also called on the industry to "retune and reconfigure" its businesses as the real estate market enters a "different period".