Tenants call the shots as supply glut intensifies

Rents will dip further this year.

It sure is tough to be a landlord in Singapore’s weak leasing market. Data released by the Urban Redevelopment Authority showed that islandwide rents fell 1.7% quarter-on-quarter in the first three months of the year, following a 1% quarterly decline in the fourth quarter of 2014.

Analysts note that the burgeoning supply of unsold homes will continue to weigh on the leasing market this year, with rents expected to soften by as much as 5% in 2015.

“The unsold inventory and newly-completed homes will compete with the existing leasing stock to vie for a limited pool for tenants, which comprise mainly existing ones looking for alternative accommodation. New expatriate arrivals are expected to remain limited due to tighten immigration policies. With landlords getting the shorter end of the stick, a tenant’s market is likely to persist,” stated  Chia Siew Chuin, Director of Research & Advisory of Colliers International..

Alice Tan, Head of Research at Knight Frank Singapore, added that the looming supply glut will heighten vacancy rates and cause rents to dip further. 

"About 19,000 private residential units are expected to be completed in 2015. This is close to the approximate 19,400 completed in 2014. This mounting supply of homes is likely to lead to a further pressure on rentals. Overall private home rentals are forecast to record a decline of 3 to 5 per cent for," Tan noted.