Singapore vacant homes rise on curbs

Sam King had a pleasant surprise when the lease on his Singapore apartment came up for renewal late last year. For the first time in six years, King was able to negotiate a lower rent with his landlord.

"It has turned into a tenant's market," said the 29-year-old sales director at an aviation services company, who got a 10 per cent reduction in the rent on his two-bedroom penthouse.

As Singapore's property market cools following five years of price gains, the number of empty apartments is on the rise, putting pressure on landlords and giving the upper hand to tenants who are renegotiating their leases.

Vacancy rates for private residential homes rose to 7.1 per cent during the third quarter of last year, up from a low of 4.6 per cent in March 2010 and the highest since March 2006, data from the Urban Redevelopment Authority showed.

Some landlords, facing tighter lending curbs and a more competitive rental market, have defaulted on their mortgages, leading to a fivefold jump in the number of properties put up for auction by the banks. A total of 159 apartments or houses were auctioned last year, up from 32 in 2013, according to auction data from real estate agent Colliers International.

With fewer expatriates coming to live in Singapore due to controls on immigration, and a large number of flats set to be completed in the next two years, the vacancy rate could rise further in 2015, bringing rents down even more.