Property prices to drop further as immigration growth slows to a crawl

On top of a massive supply glut.

Private residential prices in Singapore are expected to soften further if immigration rates remain low, according to a report by Fitch.

Prices will also impacted by the large supply of units that are about to enter the market, with vacancy rates now hovering at 9.1%.

“Singapore's private residential property prices have fallen 8.2% from its peak in September 2013. The fall has mainly been driven by tighter policy controls aimed at cooling the housing market. Fitch believes if immigration rates remain low with vacancy rates and property supply remaining elevated, property prices will continue to soften,” said Fitch.

The report highlighted that Singapore experienced significant growth in immigration up until the global financial crisis in 2008, putting pressure on existing housing supply which subsequently caused property prices to soar, which also flowed through to the public sector housing market.

In September 2015, immigration growth fell to 2.1%, almost half from 4% at end-2014. This lower growth has also correlated with a higher property vacancy rate of 9.1% in September 2015, up 2% from end-2013.