The number of vacant private residential units remained high throughout last year, due to a second consecutive year of near-record-high completion of about 19,000 units. On the demand side, the population increased at the slowest pace in more than 10 years on the back of a weak employment market and tight foreign manpower policies. 

The oil-and-gas, commodities, manufacturing and financial services sectors are all “right-sizing” their head counts in Singapore, dampening the growth of Employment Pass holders, who are potential tenants of private residential properties.

The official vacancy numbers do not include an increasing number of rooms for rent in private residences. Private residential landlords also face competition from whole flat and room subletting in the HDB segment. Even Executive Condominium (EC) units that are within their five-year Minimum Occupation Period (MOP) have rooms available for rent. As of the third quarter of 2015, there were 1,847 vacant EC units. An online search shows that all 12 ECs that have been completed since mid-2013, and hence are still well within the five-year MOP, have rooms or part of the dualkey units available for rent. 

On top of the increased competition, more tenants are signing one-year rental agreements, partly because their employment contracts may not be very secure, and partly to take advantage of declining rentals. In my work as a property agent, rentals and transacted prices seem to have declined by closer to 10 per cent in the past year, a much larger drop than those reflected in the official indices.