Chart of the Day: There's no hope in sight for Singapore's struggling property rental market

Blame weak foreigner inflows.

There’s no hope on the horizon for Singapore’s struggling property market, as the policymakers continue to keep a tight grip on foreign worker inflows.

This chart from BMI Research shows that overall housing and utilities inflation fell by 3.9% y-o-y in June, reflecting the ongoing correction in property rental prices

Singapore's stagnant property rental market is also acting as a significant drag on price growth. Overall housing and utilities inflation fell by 3.9% y-o-y in June, reflecting the ongoing correction in property rental prices (see chart).

“We do not expect the rental market to turnaround anytime soon. The government continues to throttle the inflow of foreign workers, and is increasingly taking aim at the PMET (professionals, managers, executives, and technicians) group,” BMI Research said.

“These measures further support our view that the government will not be softening its stance on foreign labour in the foreseeable future, and this will continue to undermine demand for rental properties. Meanwhile, the pipeline of supply for new units remains strong, providing further downside pressure on residential rental prices,” the report added.