Leasing demand will likely weaken given that the ongoing economic slowdown and border control measures are reducing the pool of limited tenants within the market.
Residential rents in Singapore are expected to continue facing downward pressure over the coming months, reported Singapore Business Review citing JLL.
This comes as leasing demand will likely weaken given that the ongoing economic slowdown and border control measures are reducing the pool of limited tenants within the market.
JLL noted that for the first time in 13 years, net absorption of private residential properties turned negative in the second quarter, indicating weaker leasing demand due to worsening business conditions affecting the wages and employment of expats.
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In mitigation, low completion levels along with some withdrawals resulted in negative net new supply, which kept vacancy rate unchanged at 5.4% in Q2.
With this, the residential rental index fell 1.2% in Q2, reversing Q1’s 1.1% hike. Rents for landed homes declined by -2.3% during the quarter under review, while non-landed rental index softened by 1.1%.
As developers launched no new project, the quarter only saw 1,852 new private homes launched, down 11.5% quarter-on-quarter and 26% year-on-year. Of those launched, 1,713 units were shifted, which represents a 20.3% quarter-on-quarter decline. But while new home sales volume slowed down in April and May, it posted a rebound in June.
URA revealed that the number of unsold units stood at 28,143 in Q2, down 4.3% quarter-on-quarter and 25.2% year-on-year. JLL said this marks the fifth consecutive quarter of falling unsold inventory on the back of sustained transactions within the primary market.
“The continued easing of unsold supply is a healthy development as oversupply is being reduced. However, it is still of concern to developers who are facing challenges in moving sales in the midst of cautious demand and market uncertainties,” said Ong Teck Hui, Senior Director of Research and consultancy at JLL as quoted by Singapore Business Review.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org