reporter2
27-12-22, 12:49
Influx of new homes may ease rental pressures in 2023, but supply crunch looms
Dec 23, 2022
THE influx of new homes in 2023 may ease rental pressures, but the jury is still out on whether home leasing activity will slow or stay robust.
Over 18,000 new private homes, excluding executive condominiums, are slated for completion next year, said OrangeTee in a report released on Friday (Dec 23).
A bulk (9,139 units) of the new home completions are located in the outside of central region (OCR), followed by the rest of central region (6,617 units) and the core central region (2,478 units).
PropNex noted in a separate report that an increase in supply could potentially rein in rental growth and lead to a more stable leasing market in the second half of 2023.
“There could be some relief in sight for HDB upgraders and Singaporeans who are renting as they wait for the completion of their new homes,” OrangeTee said, noting there would be more housing options and potentially more suburban homes offering affordable rents.
However, the increase in home supply will likely do nothing to prevent any potential supply crunch which may happen in the coming years in both the private and HDB rental markets, OrangeTee said.
After 2023, there will be fewer private homes completed. New HDB home supply will also tumble due to a projected, significant drop in the number of flats obtaining their Minimum Occupation Period to 15,748 units in 2023, from 31,325 units in 2022. This will dip further to 13,093 units in 2024 and 8,234 units in 2025.
There will also be fewer flat owners putting up their units for rental due to cooling measures, which have impacted upgrading opportunities, OrangeTee said.
It projects rents to rise further in 2023, although at a slower rate for both HDB and private rentals. Volumes, meanwhile, may moderate slightly as rental supply continues to shrink in the long term.
https://i.imgur.com/YGmtSKN.jpg
PropNex expects downside risks to persist in 2023, including high inflation, potential further monetary policy tightening, geopolitical tensions, rising costs, as well as worries over slowing economic growth and a global recession.
That being said, it believes the Singapore residential property sector will remain relatively stable, bolstered by underlying home demand and “healthy market fundamentals”. It does not expect home leasing activity to slow significantly in view of “persistent demand drivers”, lending support to rentals.
“PropNex does not anticipate that the government will introduce measures to cool the home leasing market,” it added.
https://www.businesstimes.com.sg/property/influx-new-homes-may-ease-rental-pressures-2023-supply-crunch-looms
Dec 23, 2022
THE influx of new homes in 2023 may ease rental pressures, but the jury is still out on whether home leasing activity will slow or stay robust.
Over 18,000 new private homes, excluding executive condominiums, are slated for completion next year, said OrangeTee in a report released on Friday (Dec 23).
A bulk (9,139 units) of the new home completions are located in the outside of central region (OCR), followed by the rest of central region (6,617 units) and the core central region (2,478 units).
PropNex noted in a separate report that an increase in supply could potentially rein in rental growth and lead to a more stable leasing market in the second half of 2023.
“There could be some relief in sight for HDB upgraders and Singaporeans who are renting as they wait for the completion of their new homes,” OrangeTee said, noting there would be more housing options and potentially more suburban homes offering affordable rents.
However, the increase in home supply will likely do nothing to prevent any potential supply crunch which may happen in the coming years in both the private and HDB rental markets, OrangeTee said.
After 2023, there will be fewer private homes completed. New HDB home supply will also tumble due to a projected, significant drop in the number of flats obtaining their Minimum Occupation Period to 15,748 units in 2023, from 31,325 units in 2022. This will dip further to 13,093 units in 2024 and 8,234 units in 2025.
There will also be fewer flat owners putting up their units for rental due to cooling measures, which have impacted upgrading opportunities, OrangeTee said.
It projects rents to rise further in 2023, although at a slower rate for both HDB and private rentals. Volumes, meanwhile, may moderate slightly as rental supply continues to shrink in the long term.
https://i.imgur.com/YGmtSKN.jpg
PropNex expects downside risks to persist in 2023, including high inflation, potential further monetary policy tightening, geopolitical tensions, rising costs, as well as worries over slowing economic growth and a global recession.
That being said, it believes the Singapore residential property sector will remain relatively stable, bolstered by underlying home demand and “healthy market fundamentals”. It does not expect home leasing activity to slow significantly in view of “persistent demand drivers”, lending support to rentals.
“PropNex does not anticipate that the government will introduce measures to cool the home leasing market,” it added.
https://www.businesstimes.com.sg/property/influx-new-homes-may-ease-rental-pressures-2023-supply-crunch-looms