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July 26, 2008
Record 13,500 homes to be completed next year
By Fiona Chan
NEXT year is likely to be a bad one for landlords.
A bumper crop of newly completed homes is scheduled to flood the market, making more apartments available for rent and pushing down rents, which saw record rises last year.
And with lower rents, private home prices - which industry observers say have reached their peak - may drop further, especially those in the prime districts.
A massive 13,399 new private homes will be ready for occupation next year.
This is double the average in recent years and the most ever in a single year, according to property consultancy CB Richard Ellis (CBRE).
Official supply numbers show 10,500 completions next year and 11,800 the year after, but CBRE's analysis, based on construction progress and delays, reveals more completions next year.
It expects this new supply to depress rents by 5 to 10 per cent on average next year, coming on top of a global economic slowdown that might lead firms to hire fewer expatriates, the main source of tenants.
In the prime areas, rents could slide up to 15 per cent next year, on top of a decline that has already begun this year, predicted CBRE.
Popular rental areas such as the East Coast and Orchard will be among the worst hit as keen demand for homes there in recent years led developers to build aggressively.
Record 13,500 homes to be completed next year
By Fiona Chan
NEXT year is likely to be a bad one for landlords.
A bumper crop of newly completed homes is scheduled to flood the market, making more apartments available for rent and pushing down rents, which saw record rises last year.
And with lower rents, private home prices - which industry observers say have reached their peak - may drop further, especially those in the prime districts.
A massive 13,399 new private homes will be ready for occupation next year.
This is double the average in recent years and the most ever in a single year, according to property consultancy CB Richard Ellis (CBRE).
Official supply numbers show 10,500 completions next year and 11,800 the year after, but CBRE's analysis, based on construction progress and delays, reveals more completions next year.
It expects this new supply to depress rents by 5 to 10 per cent on average next year, coming on top of a global economic slowdown that might lead firms to hire fewer expatriates, the main source of tenants.
In the prime areas, rents could slide up to 15 per cent next year, on top of a decline that has already begun this year, predicted CBRE.
Popular rental areas such as the East Coast and Orchard will be among the worst hit as keen demand for homes there in recent years led developers to build aggressively.
