Total leasing transactions could reach 49,000.
According to Savills, the ongoing sovereign debt crisis in the eurozone and fiscal fears in the US have mired the two major continents in low or negative growth. Asia is therefore left as the only high growth region and is attracting many from developing countries to seek employment.
Buoyed by strong domestic consumption and active intra-Asia trading, the region may possibly continue to be insulated against the full impact of any impending crisis from the west.
This is further supported by China’s economy, which may see a rebound with a pick-up in public spending and incremental reforms with its recent leadership change. Being one of Asia’s main growth powerhouses, the possible turn-around of China’s economy may potentially lift markets across Asia next year.
Despite the more stringent immigration policies put in place to limit the number of foreign workers seeking employment here, organisations will continue to place more cross-border assignments here and seek top-level executives from overseas to broaden their current talent pool. Current expats who came two years ago are also likely to renew their leases, possibly for a longer term next year.
All these factors may continue to provide a steady level of leasing support for 2013, with demand possibly flat-lining in the first half of next year. The full year of 2013 could see total leasing transactions hovering between 47,000 and 49,000 leases.
However, many new entrants may have limited rental budgets. Coupled with the increasing supply of completed luxury homes, high-end rental rates could correct 5% to 10% to below S$5 per sq ft per month in 2013. Rents for mass-market homes may still hold up well next year as they fall within the tight rental budgets of the new entrants.
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