Residential rents expected to stay soft until 2017 as leasing demand deteriorates

Over 20,000 new units are expected to be completed this year.

If you are among the countless homeowners banking on rental income to supplement your earnings, then be prepared to endure another year of weak rents and lacklustre tenant demand. According to JLL, the residential leasing market is expected to remain soft until 2017 before bottomming out, as nearly 20,516 private condominium units are expected to be completed in the remaining three quarters of 2016.

This supply wil ladd to the 2,919 units completed in the first quarter, bringing the total completion for 2016 to 23,435 units.

"This is expected to raise vacancy rates further as leasing demand could deteriorate due to the economic slowdown while restrictions on hiring of foreign labour remain in place," JLL said.

New completions in 2017 and 2018 are estimated at around 13,000 and 10,000 units respectively, JLL noted. This is significantly lower than the annual supply from 2014 to 2016.

"That could pave the way for a recovery in the leasing market, provided leasing demand improves sufficiently under better economic conditions, to balance against the supply that had been built up in the 2014-2016 period," JLL noted.