Chart of the Day: Check out how Housing & Utilities dragged Singapore’s CPI

On back of a softening housing rental market.

Pressure on residential property prices and rentals have kept the housing market red hot, and consequently had the greatest contribution to the inflation rate--and it’s not even close.

According to analysts from Maybank Kim Eng, Housing and Utilities fell by 3.6% yoy in September 2015, as low rental costs and imputed rentals on owner occupied accommodation proliferate.

“As a result, the “Accommodation” sub-component of “Housing & Utilities” dropped by -2.9% YoY in Sep 2015 (Aug 2015: -2.9% YoY),” Maybank Kim Eng said.

“However, declines in the sub-category of “Fuel and Utilities” (Sep 2015: -8.5% YoY; Aug 2015: -8.4% YoY) were lower in YoY terms after the -12.3% YoY recorded in 2Q 2015 attributed to tariff increase by an average +7.5% in 3Q 2015 on higher cost of natural gas for electricity generation,” they added.

Meanwhile, cooling measures on residential property remain a factor.

“Downward pressure on residential property prices and rentals to keep headline inflation low, on incoming supply of newly completed housing units and industrial space. This is in addition to the reduction in property tax and other cost cuts for owners of HDB flats,” Maybank Kim Eng said.