View Full Version : Wave of newly-completed condominiums drives down rents
At NV Residences in Pasir Ris (above), rents for three-bedroom units have fallen to less than $3,500 a month from $4,000. -- ST PHOTO: RAJ NADARAJAN
By Cheryl Ong
A wave of newly completed condominiums is bumping up the supply of rental homes in the market, forcing landlords to lower their asking rents to beat the stiff competition.
More cuts might be on the way as the number of private homes to be completed this year is projected to jump 62 per cent from last year, property consultants say.
At NV Residences in Pasir Ris, which obtained its temporary occupation permit (TOP) in January, landlords of three-bedroom units have lowered asking rents from $4,000 a month to less than $3,500 a month, said Mr Chris Koh, director of property consultancy Chris International.
Homemaker Angelin Loh, 46, who bought her 1,184 sq ft three-bedder there for $1.07 million in January last year, said she was unable to lease her unit for three months after collecting the keys in February.
She found a tenant only after slashing the monthly rent from $4,000 to $3,200.
Ms Loh noted that the rent was just enough to cover her monthly mortgage instalments.
Data from the Urban Redevelopment Authority (URA) last week showed that residential rents rose 0.3 per cent in the April to June period from the preceding three months, the smallest rise in five quarters.
One key reason is the surge in supply. Experts say 16,742 private homes are expected to be completed this year, up from 10,329 units last year.
Around five large-scale suburban projects have obtained TOP in the past six months, adding about 2,600 units to the supply, said ERA key executive officer Eugene Lim.
Even asking rents at older projects are being slashed, added Mr Koh.
Three-bedders at Dakota Residences at Old Airport Road, which received TOP in 2010, have been rented out for $4,700 to $5,000 a month, below landlords' expectations of $5,000 to $5,200, he said.
Next door, at Waterbank@Da-kota, which was completed last month, rents for similar units have also been advertised for $4,700 to $5,000.
Despite lower asking rents, data from CBRE Research shows that the number of new leases signed remained healthy in the second quarter, rising 16 per cent from the previous quarter.
This could be due to demand for interim housing from home owners waiting for construction of their new homes to be completed and from those whose homes have been sold through collective sales, CBRE Research said.
Experts said that given the jump in supply, investors should exercise caution if they wish to buy new units in the suburbs.
They warned that the demand for rental units outside the central region has yet to be tested.
"We might see more expatriates coming to the regional hubs when they are completed, but it will take time for newly completed projects in the suburbs to attract sufficient demand from expatriates," noted R'ST Research director Ong Kah Seng.
Recent URA data showed that suburban mass-market homes made up three quarters of new home sales last month.
SLP International executive director of research and consultancy Nicholas Mak also noted that home owners who have taken up floating interest rates for their mortgage loans might be stretched financially due to potentially higher mortgage rates in the pipeline.
Landlords faced with weak rental demand for their units will still be able to attract tenants if they are willing to price their units below the competition, said Mr Koh.
Mr Mak added that landlords can also consider throwing in incentives like a fresh coat of paint for the unit or furnishing for free.
"It's between deciding how much you want to spend to get that additional rent and simply lowering rents to get a tenant," he said.
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Eagerly awaiting top of Parc Rosewood to gauge takeup of untested super suburban MMs...
its perception verses reality.like u say not tested.
Rent down, force sell later. White paper vs blue paper now u know which paper to choose. Blue paper suggest no population increase really die left right center.
Do not think u can borrow much even when price goes down to buy another property. I advice u to go to bank and ask how much u can borrow, u will be surprise.
Rent down, force sell later. White paper vs blue paper now u know which paper to choose. Blue paper suggest no population increase really die left right center.
Do not think u can borrow much even when price goes down to buy another property. I advice u to go to bank and ask how much u can borrow, u will be surprise.
wun nid to sell if one can afford the repaymt w/o rental income. for those who bought wif only 20% $ nia .... hv to pray really hard lor.
Jonathan0503
01-08-13, 15:05
wun nid to sell if one can afford the repaymt w/o rental income. for those who bought wif only 20% $ nia .... hv to pray really hard lor.
If pay 20% but got ample reserve? Who would want to pay more than 20% downpayment in a low interest environment if they are allowed to borrow to the max for investment purpose?
If pay 20% but got ample reserve? Who would want to pay more than 20% downpayment in a low interest environment if they are allowed to borrow to the max for investment purpose?
my 20% $ here refer to those who can oni come up wif 20% of the ppty $ & plan to use future rental income to repay the bal 80% of the loan.
Who can believe that the estimated rental figures used by agents to sell the apartments vs actual reality later are different.
I'm shocked!
Well...... for anyone reading the news for the last few years we knew this was coming. Looks like judgement day has begun.
When interest rates go up, higher monthly repayment + lower rental is going to lead to interesting times in the years ahead.
the end is coming:eek: run for ur life:47:
I am glad still got lot of bears and sideliners around. Look like not going crash. Lol. But hor go to bank and ask first how much u able to loan. I can tell u it is far less than 60% of your monthly gross income.
Who can believe that the estimated rental figures used by agents to sell the apartments vs actual reality later are different.
I'm shocked!
Well...... for anyone reading the news for the last few years we knew this was coming. Looks like judgement day has begun.
When interest rates go up, higher monthly repayment + lower rental is going to lead to interesting times in the years ahead.
thomastansb
01-08-13, 15:40
I can't wait for Altez. Their 2 bedders were sold around 2M from developer. I don't know how they are going to finance it by rental alone.
I can't wait for Altez. Their 2 bedders were sold around 2M from developer. I don't know how they are going to finance it by rental alone.
Jin scary indeed! But MM still rulez in terms of quantum for some locations.. i remember gd old days skysuites beside altez, 1rm MM lowest 6xxk-700k, 2rm 699sqft MM around 1.4mil.
"Ai Zhai!" Relax & Be calm..
Rent down, force sell later. White paper vs blue paper now u know which paper to choose. Blue paper suggest no population increase really die left right center.
Do not think u can borrow much even when price goes down to buy another property. I advice u to go to bank and ask how much u can borrow, u will be surprise.
with fully paid HDB, will bank loan more?
phantom_opera
01-08-13, 17:18
this is already expected especially in Pasir Ris ..... the entire Pasir Ris is like under construction war
property old bird like amk already repeatedly warned in this forum that rental demand in suburb is yet to be tested
tightening of immigration also does not help with many EP holders sent back home in order to boost Singaporean/SPR salary
those who bought PC should expect a softening rental especially for large units .. however, US Fed to the rescue ... shot term rate unlikely to go up till 2016
MM is still king .. very hard to have negative cash flow
Just felt a bit funny when the owner sounded like a complain that the rental only covers her installment. She is still easily having a capital repayment gain of about $2k pm, a lot of money to me.
I think many either had forgotten or too young into property Market to remember or experience that many owners have cough out cash for their installment even before the sub prime toll.
So is very important to buy location location location but not rocket high price set by developers. Cheers and be calm and plan for it moving forward.
I remember NV residences launch price was quite low in 2010 when property prices were still low.
If NV residences owners are having trouble then just imagine those people who are bought property in the last 2 years, they will be dead in the next 2 years when the huge oversupply will hit the market.
I remember NV residences launch price was quite low in 2010 when property prices were still low.
If NV residences owners are having trouble then just imagine those people who are bought property in the last 2 years, they will be dead in the next 2 years when the huge oversupply will hit the market.
Incidentally, those who bought after govt stepped in to lower the LTV will be safer, this buyers are forced by our government to buy within ones mean ;)
To me the TDSR is one big CM. It is alot stronger than most people think. My prediction for the next 3 years.
OCR: down 10-15%
Landed will prob get hit too. just a gut feel
To me the TDSR is one big CM. It is alot stronger than most people think. My prediction for the next 3 years.
OCR: down 10-15%
Landed will prob get hit too. just a gut feel
what goes up fast comes down fast:cool: landed up fastest:rolleyes:
If down 10% to 15% there is no need to sell at all.
This is why it is important to know who are the other buyers in the same condo you buy.
Let Office Boy share a small tip, probably most more experienced players here already know.
This is call owners' profile. One of the key statistic Office Boy will force himself to come up with (though maybe just an estimation, but still must do).
When buying a PC, Office Boy must know how many % of buyers are going to rent it out. This is then compared with the rentability of the location. Rentability is then linked the the expat base in that area.
Eg. Newton has a good base of Americans, Queenstown got many Japanese.
Then using this, I will project the rental myself.
Of course the other point to note is the number of upcoming units vis-a-vis my rentabiity assessment.
Ok! That's all for a Friday morning!
Got to go office to work liao!
DKSG
Rent-ability and competitiveness go hand in hand. It is very good when the rental market is good but when rental market turns the other direction, it is going to be cut throat situation. Therefore, go for areas where u see that has a sustainable rate of job creations. That is safest in my opinion. U could be the only few units in the whole vicinity ...this is when u need your foresight! It is always very very dangerous to buy condo where there are a lot of rental units, in my opinion...Experience can help u if u use it the right way...but things doesn't going to stay the same forever. :2cents:
This is why it is important to know who are the other buyers in the same condo you buy.
Let Office Boy share a small tip, probably most more experienced players here already know.
This is call owners' profile. One of the key statistic Office Boy will force himself to come up with (though maybe just an estimation, but still must do).
When buying a PC, Office Boy must know how many % of buyers are going to rent it out. This is then compared with the rentability of the location. Rentability is then linked the the expat base in that area.
Eg. Newton has a good base of Americans, Queenstown got many Japanese.
Then using this, I will project the rental myself.
Of course the other point to note is the number of upcoming units vis-a-vis my rentabiity assessment.
Ok! That's all for a Friday morning!
Got to go office to work liao!
DKSG
This is why it is important to know who are the other buyers in the same condo you buy.
Let Office Boy share a small tip, probably most more experienced players here already know.
This is call owners' profile. One of the key statistic Office Boy will force himself to come up with (though maybe just an estimation, but still must do).
When buying a PC, Office Boy must know how many % of buyers are going to rent it out. This is then compared with the rentability of the location. Rentability is then linked the the expat base in that area.
Eg. Newton has a good base of Americans, Queenstown got many Japanese.
Then using this, I will project the rental myself.
Of course the other point to note is the number of upcoming units vis-a-vis my rentabiity assessment.
Ok! That's all for a Friday morning!
Got to go office to work liao!
DKSG
but in the 1st place, how did u even noe the profile of the buyers? as in whether they will rent it out? Wat we declare in the OTP may not be true wat.
smellyfish
02-08-13, 10:11
frankly last year when i renewed a lease in CBD i already experienced softening rent.
anyway, for tanah merah and simei, rent is strong because a lot of banks' backend are in Changi business park, and they do have a $4k thereabout budget.
beyond that, if you are at jurong or pasir ris trying to attract other type of migrant workers, not sure what their budget are.
either that, you may face 20 pinoys in your MM unit. do you really want that?
back to the tanah merah belt, now there's little competition, but once that MRT line comes up, it puts the whole changi prison area into competition
for any project which is mmful for example, its quite clear most of the units are gonna be rented out.
unless there are really that many doomed singles or childless couples.
or characters like simon cowell who use other peoples wives to sow his seeds.
Wait till next year to 2016, when many many more of those projects launched in 2011 to 2013 period top, we could be faced with extremely high competition and very soft rental market.
Only those projects with mrt and malls beside could get tenant. And within a project, only those better facing units could fetch a break even rental .:beats-me-man:
Very easy: First look at the quantum of most of the units available, then the size.
If Quantum mostly >$3m in today's market, generally should be condo estate with higher profile people. Quantum >$3m units generally won't be MMs, will be family size 2 BRs and above.......
If Quantum <$1m, size <600 sqft, better don't touch! :doh:
but in the 1st place, how did u even noe the profile of the buyers? as in whether they will rent it out? Wat we declare in the OTP may not be true wat.
Very easy: First look at the quantum of most of the units available, then the size.
If Quantum mostly >$3m in today's market, generally should be condo estate with higher profile people. Quantum >$3m units generally won't be MMs, will be family size 2 BRs and above.......
If Quantum <$1m, size <600 sqft, better don't touch! :doh:
I agree wif u on the "Quantum mostly >$3m being higher profile ppl"
but quantum < $1m for <600sqft is the typical $ of a lh mm unit of most project wat. might be hard to filter.
Wait till next year to 2016, when many many more of those projects launched in 2011 to 2013 period top, we could be faced with extremely high competition and very soft rental market.
Only those projects with mrt and malls beside could get tenant. And within a project, only those better facing units could fetch a break even rental .:beats-me-man:
tats y in sg, it is prudent to pay a little higher for a unit not more den 5 min fm mrt, got amenities nearby, no west sun, non low floor, efficient floorplan layout unit. wif the above, even proj in ocr is still rentable.
either that, you may face 20 pinoys in your MM unit. do you really want that?
20 pinoys in your MM unit it will become a PP(Pinoy Pinoy) unit:D :D :D
sound level 246dB:scared-1: :eek: :D
darkseed73
02-08-13, 13:55
My feel is hold on to a job even if u currently have rental income.
Some ppl rent out a house, then quit his/her job that's so myopic.
Having multiple sources of income is the ONLY way to counter risk.
Holding a job is one of them.
If u don't want stress just take up a simple job lor.
Be productive is good for health too.
My feel is hold on to a job even if u currently have rental income.
Some ppl rent out a house, then quit his/her job that's so myopic.
Having multiple sources of income is the ONLY way to counter risk.
Holding a job is one of them.
If u don't want stress just take up a simple job lor.
Be productive is good for health too.
Welcome to the World of Office Boy!
What you say is true if you hold another 1 or 2 units. But if you hold more units, seriously job is optional. Do it for the fun of it.
There is only ONE life!
Enjoy it to the MAX - Singaporean Style - everything also want the most out of it!
DKSG
agree wif both of u...
now it will b called an occupation instead of job or career... occupy time and space nia
It pays to pay more for a unit in high-profile owners estate than low-profile owners estates?
tats y in sg, it is prudent to pay a little higher for a unit not more den 5 min fm mrt, got amenities nearby, no west sun, non low floor, efficient floorplan layout unit. wif the above, even proj in ocr is still rentable.
It is obviously isn't it? :D
It pays to pay more for a unit in high-profile owners estate than low-profile owners estates?
It is obviously isn't it? :D
Beware - there are some characters here who will slam you upside down leftside right for saying its certainly more superior to buy into a renowned location versus some far west area.
DKSG
It is Ok for him to do whatever he wanted. I just want to say that for NOW, it is a fact. I believe that 100 years later, it is still a fact............ :tongue3:
Beware - there are some characters here who will slam you upside down leftside right for saying its certainly more superior to buy into a renowned location versus some far west area.
DKSG
location. location. location:cheers6:
Beware - there are some characters here who will slam you upside down leftside right for saying its certainly more superior to buy into a renowned location versus some far west area.
DKSG
when the market is doing well, one wun see a problem. the real value of a ppty can only be tested in times of crisis.
It pays to pay more for a unit in high-profile owners estate than low-profile owners estates?
as far as property is concerned, location is the key.
many ppl like diamond, the price of diamond even surpass tat of pure gold. but in time of crisis, it is worthless!
location. location. location:cheers6:
.... and in Singapore's case
timing, timing, timing
phantom_opera
05-08-13, 15:09
other than location and timing, in this modern era I will shout
"QE, QE, QE" !!!
when the market is doing well, one wun see a problem. the real value of a ppty can only be tested in times of crisis.
sounds like the same for marriage:D:D:D
sounds like the same for marriage:D:D:D
not the same la ... ppty hv safe bet like buying FH in CCR but the safest bet in marriage is actually not getting into marriage :D
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