The high vacancy rates are due to the huge supply of new homes and continued muted leasing interest.
The overall vacancy rate of private residential properties in Singapore remains high due to a myriad of factors, one of which is the significant number of new completions, reported the Straits Times.
Last quarter, there were 348,080 private homes available here, of which 29,197 were unoccupied, translating to a vacancy rate of 8.4 percent, based on data from the Urban Redevelopment Authority (URA).
Although this figure is slightly lower than the 8.9 percent recorded in Q2 2016, which was a 16-year high, it still exceeded the 7.8 percent and 8.1 percent seen in the last quarters of 2014 and 2015 respectively, said R’ST Research Director Ong Kah Seng, who remains worried about the elevated vacancy level.
Exacerbating the situation is the huge supply of private homes, as 20,000 units were built last year, compared to 13,150 units in 2014 and 18,971 in 2015.
“High vacancy rates in 2016 are overall propelled by a combination of factors – substantial new private residential completions, and continued muted leasing interest amid crimped or no housing allowances by many foreign professionals,” noted Ong.
Another reason is that some owners may not want to reduce their rental prices, shared Colin Tan, Director of Research and Consultancy at Suntec Real Estate Consultants.
“The fact that there are many unoccupied units means that the majority of owners of units that have been completed over the past few years were speculators or investors,” he said.
For example, many units at The Shore Residences in the East Coast have been left vacant for long periods of time, said Jose Trinidad, a Filipino expatriate staying in the 408-unit residential project completed in 2013.
“Most of the people living here are renting and the competition for tenants is very high nowadays. Many units are empty because the landlord just cannot find tenants,” noted the 38-year-old auditor.
An online check revealed that there are currently 55 units for lease at the project and 90 up for sale, but it is unknown how many of them are unoccupied.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
