Chart of the Day: Take a look at Singapore's skyrocketing private home vacancy rate

Vacancy rate is now at 7.1%.

Private residential sales volume picked up slightly in Q2, thanks largely to price cuts and new project launches. However, Singapore’s private home vacancy rate still inched up to 7.1% from 6.6% in Q1.

According to a report by CIMB, this higher vacancy rate of is likely to continue to pressure the rental market and consequently, investment demand.

“We continue to believe that restrictive policies and weak investment demand are likely to lead to a 10-15% decline in property prices over the next two years,” noted the report.

Here’s more from CIMB:

2Q14 Property Price Index (PPI) fell 1.0% qoq and is 3.2% below its previous peak in 2013 while HDB Resale Index (HRI) dipped 1.4% qoq and is 5.3% down from its peak in 2013.

Volume picked up from the previous quarter to 4,118 units transacted in total (vs 2,813 in 1Q14), largely due to higher new home sales.

Vacancy rate increased from 6.6% in 1Q to 7.1%. Median rents fell slightly across all regions as physical supply increased with the completion of 4,902 units during the quarter (vs 4,114 in 1Q14).