Residential vacancy to reverse its upward trend next year

But it could peak at 11.5% this year.

The number of unsold private residential inventory indicates that 2018 is likely the year where vacancy could reverse its upward trend as supply tapers, according to a report from UOB KayHian.

However, vacancy rates could see their peak this year at 11.5% before beginning to improve next year to 2020, where rates are expected to go down to 10.1%.

"This will be propelled by tapering private residential supply, as even we forecast muted residential demand of about 8,200 units p.a. from 2015 to 2020, by incorporating conservative population growth estimates at a CAGR of 1.2%," said UOB.

In this case, the firm puts its bets on City Developments Ltd to benefit, as it derives about 30% of its value from the residential segment. CapitaLand is also cited as a benefactor, given its diversification across geographies and asset classes.