Chart of the Day: See the massive spike in Singapore’s home vacancy rate

Large oversupply looms over private developers.

Analysts fear that the government’s efforts to scale down residential supply may not be enough to avert a looming oversupply in 2015 to 2017.

A report by Barclays Research noted that the vacancy rate could hit 9.9% by 2016 assuming an annual demand of 15,500 units

According to Barclays Research, “We believe this is testament to the looming oversupply in 2015-2017 as the government reiterated the reduced future supply will be ‘added to the existing large pipeline supply of more than 90,000 private residential units (including ECs)’.”

Here’s more from Barclays:

Private housing (including ECs) on the Confirmed List for 2H14 is down 15% h/h and 34%
y/y to 3,915 units. The bulk of the supply is now made up by the Reserve List, which has
also been scaled down and which is unlikely to be triggered for sale should market
conditions continue to deteriorate.

We maintain our negative stance on the Singapore residential sector as we see an oversupply of private housing properties and expect prices to fall 20% by 2015E in view of an expected interest rate rise, coinciding with peak supply, and think the vacancy rate could reach a record 10% by 2016E.