Chart of the Day: Here’s proof that occupancy rates are dipping beyond the 90% mark

It’s headed to the lowest occupancy since the 90s.

The small improvement in occupancy rates this quarter is not a reason to cheer for the residential market, as analysts say occupancy rates might dip below the 90% mark by the end of the year.

According to analysts from Orangetee Research, the uptick in occupancy from 91.9% in 4Q15 to 92.5% in 1Q16 can be attributed to a smaller number of completions in 1Q16, as only 2,855 private residential units were completed in 1Q16 as compared to 5,299 private residential units in 4Q15.

However, Orangetee said another 20,516 private residential units are expected to be completed in 2016.

“So going forward, we may actually see occupancy rates dip below the 90% mark by the end of the year and should it materialise, it’ll be the lowest occupancy rate since 3Q98 (90.3%),” Orangetee Research said.

Meanwhile, volumes fell due to the stock market turbulence this January, even with strong sales from Cairnhill Nine and the Wisteria.

“The two newly launched projects brought in a combined sale volume of 293 units, representing 20.6% of the total primary sales for 1Q16. Decline in volume could be due to turbulence in the stock market at the beginning of the year,” Orangetee Research said.

“It is customary for uncertainties arising from turbulence in the stock market to instigate a mood of caution and buyers generally stayed away from the market,” Orangetee Research added.