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Thread: Developers concerned about home vacancy rates: REDAS

  1. #1
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    Default Developers concerned about home vacancy rates: REDAS

    The president of the Real Estate Developers' Association of Singapore said the supply of 68,000 completed new residential units in the next few years is likely to cause home vacancy rates to head towards 10 per cent.

    SINGAPORE: The real estate industry has urged the Government to be prepared to take "supportive measures" to prevent a tipping point, if the property market turns volatile and worsens further.

    Speaking at the Real Estate Developers' Association of Singapore's (REDAS) 55th anniversary dinner on Wednesday evening (Nov 26), the association's president Mr Chia Boon Kuah added that the looming supply of 68,000 completed new residential units in the next few years is likely to cause home vacancy rates to head towards 10 per cent.

    Official figures have put the private home vacancy rate at 7.1 per cent in the third quarter of this year.

    "Developers are concerned. Genuine home buyers from the Singapore market have adopted a wait-and-see attitude. The situation poses significant challenges to the property sector, and there could be wider impact. It is in no one's interests to witness unintended outcomes," Mr Chia said.

    Mr Chia also noted that private home prices have declined in the last four consecutive quarters, while transaction volume has also dropped from 18,000 in 2013 to less than 9,000 expected this year.

    National Development Minister Khaw Boon Wan was guest of honour at the dinner.

    Separately, 10 REDAS developers have come together to pilot the association's developer-centric Building Information Modeling project. The venture will allow those in the industry to share information, improve workflow and raise productivity.

    The developers are Allgreen. Bukit Sembawang, CapitaLand, CDL, CEL, Far East Organisation, Frasers Centrepoint, GuocoLand, Keppel Land and Wing Tai. A Memorandoum of Understanding for the project was signed at the anniversary dinner.

    http://www.channelnewsasia.com/news/....html?cid=fbsg

  2. #2
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    Don't understand, why don't REDAS ask the developer to stop buying land and property agent go for long holiday.

  3. #3
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    Domino effect. Lawyers, agents, workers all out of job

  4. #4
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    The developers should not bid the land at such high prices and expect us - consumer as suckers to absorb it for them!

  5. #5
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    buys can vote with their wallets. don't like the price don't buy. and developers won't be so aggressive with the bids. like now.
    “Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.”
    ― Martin Luther King, Jr.

    OUT WITH THE SHIT TRASH

    https://www.facebook.com/shutdowntrs

  6. #6
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    It's a vicious cycle. The end winner is simple - government.

  7. #7
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    prices have climbed at least 40-50% but now down 5%.
    Would current status quo be good enough to keep buyers, developers and everyone happy?

  8. #8
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    SINGAPORE: Property analysts said the rental yield for shoebox units in the suburbs are comparable to their counterparts in the city. But going forward, they warn that landlords may not get the kind of rental income they expect.

    This is because the Urban Redevelopment Authority (URA) projects that there will be about 11,000 shoebox units in Singapore by the end of 2015. In turn, this would provide tenants options from which to cherry-pick.

    Shoebox units are homes that are less than 500 square feet in size, and are typically one-bedder units with a bathroom.

    In 2012, Minister for National Development, Khaw Boon Wan cautioned investors against the influx of shoebox units in the heartlands, and said he would not hesitate to intervene should there be clear evidence of unsustainable investor demand.

    However, the experience has been positive so far. Senior director at Savills Singapore, Mr Alan Cheong, said shoebox units in the suburbs have a reasonably high rental yield of around three per cent, which is higher than the two to three per cent yield for other types of private homes.

    Mr Cheong added that shoebox units are especially popular with single expatriates because their companies have either increasingly reduced their housing budgets, or because they are hired on local employment terms.

    A search on property portal Property Guru, found that the average rent for a shoebox unit in areas like Geylang and Paya Lebar is S$2,500 per month, while prices go up to S$4,000 in prime areas such as Mount Sophia.

    Mr Cheong said shoebox units that are in the price range of S$2,000 to S$3,000 have the upper hand: "Today, people coming to Singapore to work... They have that limited budget to spend and S$4,000 seems to be a price where you fall into no man's land territory. Hence, it may be rather difficult to rent out at that price."

    Analyst Chris Koh, Director of Chris International, said the appeal of shoebox units remains strong with investors due to its lower capital outlay and rental appeal, but he also cautioned that tenants have other options. "With a budget of S$2,500 to S$3,000, there are some outskirt condominiums with two and three bedrooms that they can rent. So, they do make comparison with these shoebox units because these units are rather small," he added.
    “Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.”
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