How foreign labour cuts will affect rental demand for properties

Proportion of foreign workers was 33.6%.

According to Nomura, another factor that could undermine rental demand for Singapore property is the impact of reduced imported foreign labor.

Based on the general guide that the foreign work force ratio should be kept at about 30% of the total workforce, the Minister of Manpower reminded that the 70,400 increase in foreign workers in 2012 was still too high and this needed to be reduced further.

Here's more from Nomura:

As at Dec 2012, the proportion of foreign workers (excluding domestic workers) was 33.6%, compared to 32.8% in 2011.

Given that the proportion is still above the 30% target threshold, the rate of increase in foreign workers is expected to slow further.

We believe most of the tightening of labor will be in the services and construction sectors, which saw increases of 22,800 and 34,900 respectively in 2012.

Lower inflows of imported labor will likely impact demand for rental properties going forward.

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