Amid a slew of property market data released by the Urban Redevelopment Authority (URA) yesterday, one number stood out: the vacancy rate, which hit a 16-year peak of 8. 9 per cent in the second quarter. This represents a formidable 30, 310 vacant private residential units across the island.
But while high vacancy rates do not bode well for the rental market, this seems to be the one rare area of negativity in a market that is gaining some healthy colour.
The store of wealth in households is strong still. The conventional argument that when vacancies up go, people unable to find tenants default on their housing loans and are forced to sell may not apply for now, as interest rates are still low especially, said an analyst. People are able to hold on to their empty unit for far longer than in the past, or deal with lower rents.
So , it wouldn’t be unusual to expect vacancy rates to continue hitting record highs, fuelled by rising home completions at the same time that housing volumes and prices continue to stabilise.
By most accounts, the sales market today is stirring as home hunters tire of waiting for further falls and start trickling back in.
It is a recovery that seems to be led by the luxury segment, districts 9 and 10 especially. This is different from the last market upturn, starting in 2009, when the recovery was led by Zones 1 and 2 — where rates are now nonetheless sliding.
A person reason to think the market can be approaching a trough is at resale amounts, which have taken care of across all of the segments. They will shot up thirty four per cent every year in the second quarter to 599 inside the core central region, went up by 14 % to 620 in the associated with central location, and grew 10 % to 921 in the external central and surrounding suburbs or location.
At the same time, the real number of uncompleted and unsold private homes has been arriving off. These types of amounted to 21, 489 units in q2, the lowest level since the URA started collecting data with them in 2001.
Unsold share should are soaked up, offered underlying require. New product sales have scheduled steady around 7, 500 both a year ago and in 2014 annually.
The sales marketplace has stabilised, with no pressure from a huge wave of stock being released in.
Would-be buyers should take be aware though that rentals usually tend to continue dropping. And via rising source apart, rental demand — foreign-led — does not appear to be improving commonly. Vacancy prices could enter in the double numbers even.
Concerning cooling actions, the much better market belief means the federal government is improbable to fine-tune them in all probability. But there is not any hurry for doing it to add more actions also, when this economic recovery could be a immediate blip.