Chart of the Day: Residential rents slip further as landlords battle it out

Luxury flats eroded faster than in 2013.

The residential sector is facing a battery of issues, some of which will continue to challenge developers and landlords in the coming months.

Newly completed and existing developments both took a toll on landlords in December 2014, as rents moderated by another 0.8% QoQ to $5.13 per sq ft per month.

According to a report by Colliers International, various headwinds are expected to keep a lid on home-buying demand in 2015. These include the continued enforcement of cooling measures amid the tightened credit environment, a mounting supply of new homes, a less buoyant leasing market and the impending rise in interest rates. These headwinds are expected to persist throughout the year amid uncertainty in the global economic arena.

Colliers adds that consequently, developers’ sales volume in 2015 is expected to remain subdued in the region of 7,000 to 8,000 units, comparable to the 7,489 units sold for the whole of 2014. In view of the downside pressures, prices of private residential properties are projected to remain on a path of moderation as developers and sellers progressively adjust prices to move units. Furthermore, developers’ land banking strategies are expected to remain measured and even opportunistic in the highly regulated residential property market, allowing them more flexibility in adjusting prices to encourage home purchases.