INTERNATIONAL PROPERTY NEWS
24,000 Private Homes In Singapore
Sitting Empty
Worth Putting Money In Malaysia
Says Fortune Magazine
M
alaysia is featured in
a popular business
publication, Fortune
Magazine in its
February 2015 issue as one of the
‘seven emerging markets worth
putting your money in’.
M
ost of the Singaporean
property buyers are
still keeping hope
that the prices to
fall further. However, their waitand-see attitude has brought
a consequence in which more
completed private homes are
sitting empty.
Latest data from the Urban
Redevelopment Authority
(URA) shows that during the
fourth quarter of 2014, there
were 308,814 completed
private units on the market
but more than 24,000 units
remained vacant.
In a statement, URA said the
vacancy rate of completed private
residences, excluding executive
condominiums (ECs), climbed
from 7.1 percent in Q3 to 7.8
percent at the end of Q4. Media
reports stated this is the highest
it has been since Q4 2005 when
a vacancy rate of 8.4 percent was
recorded due to depressed rents.
The problem could get worse as
there are many more uncompleted
units in the pipeline. Although the
total supply of uncompleted private
homes decreased to 68,960 units in
Q4 from 74,496 units in the quarter
before, there are still 26,742 unsold
units in this segment.
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Based on expected completion
dates reported by developers,
the housing market will see over
20,000 private residential units
being completed in 2015. Another
20,000 units will be ready in 2016.
According to Alice Tan, Research
Head at Knight Frank Singapore, a
looming supply glut is expected to
further exacerbate rising vacancy
rates. This is likely to exert further
downward pressure on prices in
the upcoming quarters.
American Political Scientist, Ian
Bremmer, who is also specialized
in global political risk penned that
in Malaysia, the incumbent (Barisan
Nasional) government is trying to
stay ahead of increased demand
for change.
The Prime Minister Datuk Seri Najib
Tun Razak scrapped fuel subsidies
and will enact a six percent Goods
and Services Tax in April to improve
his government’s fiscal position.
Bremmer also believed that Najib
will likely accelerate his Economic
Transformation Programme by
introducing further tax incentives
for foreign investors as well
as further liberalisation of the
manufacturing and financial
services sectors.
It is a fair bet that as growth tapers
in China (and the impact of that
slowdown is felt in Malaysia), Najib’s
government will feel pressured
to boost public spending on
infrastructure, education and
health care, he further added.
That is a good thing, particularly if
authorities, as expected, continue
to advance a broad fiscal reform
agenda, with support from the
middle class, to balance the
nation’s budget by 2020, he wrote.
The other emerging markets that
Fortune Magazine described
as the ‘lucky seven’ are India,
Indonesia, Mexico, Columbia,
Poland and Kenya.
To prevent a flood of empty homes
on the market, developers chose to
sell units from older developments
last month instead of launching
new projects, said analysts.
Despite this, only 230 units found
buyers in December, the lowest
monthly sales volume since
January 2009 when developers
moved 108 units. For the whole of
2014, developers sold 7,316 units,
significantly lower than the 14,948
units in 2013.
Tan also explained that with more
housing options available, tenants
are now very budget-conscious.
This has, in turn, resulted in a rising
leasing preference for city-fringe
locations rather than the city centre.
Cover of a Fortune Magazine with
Mark Zuckerberg on the cover
www.PropertyHunter.com.my
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