The high vacancy rate is not just an affliction of Sentosa Cove.
Mr Jose Trinidad, who lives at The Shore Residences in East Coast, said many of the 408 units in the six 20-storey towers are left empty for long periods of time. The development was completed in 2013.
The 38-year-old Filipino expatriate who works as an auditor added: “Most of the people living here are renting and the competition for tenants is very high nowadays. Many units are empty because the landlord just cannot find tenants.”
A check online showed that 90 units were for sale and 55 for rent. It is unclear how many of these units are vacant.
According to the latest Urban Redevelopment Authority (URA) data, there were 29,197 vacant private homes out of 348,080 available units around Singapore in Q4 2016 – a vacancy rate of 8.4 per cent.
While not as high as the 8.9 per cent in Q2 2016 – a 16-year record at the time – it is still cause for concern.
The drop in vacancies may be due to landlords cutting rentals to attract tenants. This is not backed by solid leasing and economic fundamentals.
The Q4 2015 and Q4 2014 vacancy rate was 8.1 and 7.8 per cent respectively.
It did not help that last year, there was a large supply of private homes – an estimated 20,000 units were completed last year, compared with the 18,971 units in 2015 and 13,150 units in 2014.
High vacancy rates in 2016 were overall propelled by a combination of factors – substantial new private residential completions, and continued muted leasing interest amid crimped or no housing allowances by many foreign professionals.
The rapid increase in dwelling units is not matched by population growth. The reason is simply oversupply.
Experts said there could also be more owners who do not live in Singapore on a permanent basis, and prefer not to rent out their units. It could be because the owners cannot find tenants or do not want to lower rents.
The fact that there are many unoccupied units means that the majority of owners of units that have been completed over the past few years were speculators or investors, and not owner-occupiers.
Some owners may also be wary of a mismatch between the maintenance costs in renting out their units, and lower rents. These could be locals who do not want to rent out their units because of the weak rents now and are afraid of tenants damaging their unit.
Adapted from: The Straits Times, 5 February 2017