The1.7M sq ft net absorption in the first 9 months a good sign.
This is despite lack of strong demand from financial institutions, which was offset by broader-based demand from other industries, said Macquairie.
Grade A rent decline slowed in 3Q12 and Macquairie believes it will bottom out over the next few quarters.
Here's more from Macquairie:
We expect the prime Grade A to recover first, given limited supply over the next few years.However, islandwide vacancy is likely to remain high due to abundant supply in Grade B Core CBD and decentralised locations.
No significant policy measures expected
Taking 2011 and 2012 measures together, the Singapore residential market already witnessed severe restrictions. There were higher transactions costs via the Additional Buyer’s Stamp Duty (Dec 11 measures) and speculative activity is curbed with the Seller’s Stamp Duty (Jan 2011 measures).
Lower Loan-to-Value (LTV) limits were in order especially for second or more home buyers and developers’ average size of new developments cannot be less than 70 sq metres (Sep 2012 measures). Lastly, home loans will have a maximum limit of 35 years and tighter rules if home loans exceed 30 years or cross the borrowers’ retirement age of 65 (Oct 2012 measures).
We therefore do not expect any more significant measures in the Singapore residential market. Given the low interest rate environment, the latest move to cap home loans at 35 years is seen as a prudent move by the central bank, to nip potential issues from rising property prices.
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