Chart of the day: Housing rent prices are stabilising but they aren’t growing, say analysts

Accommodation prices have been negative for almost two years.

Don’t expect property prices to show signs of growth for the next couple of months as analysts say deflationary pressures are likely to persist over the coming quarters.

According to a report by BMI Research, residential property prices will continue to grind lower. The accommodation category, which is dominated by imputed rental costs, has been negative for 23 straight months, and fundamentals suggest that this trend will continue over the near-term, BMI Research noted.

“While the rate of contraction has come down slightly, rental prices for residential properties continue to decline in y-o-y terms (and, for non-core central properties, in q-o-q terms as well),” BMI Research added.

Meanwhile, the rate of professional immigration is likely to remain modest over the coming quarters and, indeed, years, as a result of the government's ongoing restructuring of the labour market.

“Meanwhile, although the gradual decline in total private residential units under construction will provide support for a soft-landing over the medium-term, the supply of new units to the market over the near-term will be robust, keeping both sale and rental prices in check,” the report said.

“According to Urban Redevelopment Authority (URA) figures, 23,062 private property units (including executive condominiums, or ECs) will be completed between Q216 and Q416, versus a total of 22,267 for the entirety of 2015,” it added.