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19-03-15, 18:38
http://www.businesstimes.com.sg/real-estate/rents-for-condos-hdb-flats-slip-further-in-feb-srx
Rents for condos, HDB flats slip further in Feb: SRX
Softness was widely expected and will likely persist this year, say property consultants
By Lynette Khoo
[email protected]@LynetteKhooBT
12 Mar
SOFTNESS persisted in the residential leasing market, with rents for both private non-landed homes and public housing flats still heading south in February.
Rents of non-landed private residential units posted a 0.8 per cent drop in February, compared to a month ago, dragged mainly by rents in the city centre and city fringe, based on SRX flash estimates. This represents a 6.2 per cent fall from February last year and 10.5 per cent down from the SRX rental index's peak in January 2013.
The SRX index for HDB rentals also marked a 0.3 per cent drop in February compared to January, dragged mainly by three and four-room flats. Rents dropped in both mature and non-mature estates in February, down 0.6 per cent and 0.1 per cent from a month ago.
Headwinds plaguing the residential leasing market will continue to put a cap on rents for private homes and HDB flats, consultants say.
"We expect overall rents to further decline by 6-8 per cent for the whole year as more new non-landed are slated for completion over the course of the year," said ERA key executive officer Eugene Lim.
Several negative factors are still in play, he added, citing a record number of private home completions, tighter inflow of expatriates into Singapore, a stringent property tax regime and a rising interest rate environment.
"Landlords are no longer allowed to apply for vacancy refund on their property tax should they be unable to rent out their units," Mr Lim said. "As interest rates are also on the rise, there is a sense of urgency for landlords to quickly secure their tenants to negate holding costs. Most may be prepared to accept a lower rental so as not to leave the unit vacant."
According to SRX's rental index, non-landed private residential units in Core Central Region (CCR) and Rest of Central Region (RCR) saw month-on-month rent declines of 1.2 per cent and 1.5 per cent respectively in February, while rents in Outside Central Region (OCR) stayed unchanged from January.
SRX revised the rental index for January, which now shows rents for non-landed private residential units unchanged from December 2014 instead of an earlier reported 0.2 per cent month-on-month rise in non-landed units in January based on flash estimates. SRX's flash estimate typically represents 60 per cent of transactions for the reported month.
R'ST Research director Ong Kah Seng noted that the leasing demand for private residential properties is usually stronger in the early part of the year, but the month of February was probably affected by the festive Chinese New Year season.
"Owners of newly completed condominiums are expected to cut rents significantly to secure tenants for the initial investment term of the first one to two years," he said. This could result in a narrowing of the rental premium for new properties versus the older properties.
Rental volumes declined in February. SRX estimates that 2,586 units were rented in February, a 25.8 per cent decrease from 3,487 units rented in January. Mr Lim of ERA pointed out that a majority of leasing activity was driven by relocations of existing tenants to better options rather than the inflow of new tenants.
At the same time, an estimated 1,371 number of HDB flats were rented in February, a 25.7 per cent decrease from 1,846 units rented in January, according to SRX.
Mr Ong believes that the better rental performance of five-room flats and executive flats in February, which saw a respective 0.7 per cent and 0.5 per cent month on month rise in rents, might be "a random occurrence" as smaller flats still offer better value for tenants.
As more flat owners move into newly completed condos and put up their HDB flats for leasing, the HDB flat rents are expected to dip in this year by up to 7 per cent, Mr Ong added.
Rents for condos, HDB flats slip further in Feb: SRX
Softness was widely expected and will likely persist this year, say property consultants
By Lynette Khoo
[email protected]@LynetteKhooBT
12 Mar
SOFTNESS persisted in the residential leasing market, with rents for both private non-landed homes and public housing flats still heading south in February.
Rents of non-landed private residential units posted a 0.8 per cent drop in February, compared to a month ago, dragged mainly by rents in the city centre and city fringe, based on SRX flash estimates. This represents a 6.2 per cent fall from February last year and 10.5 per cent down from the SRX rental index's peak in January 2013.
The SRX index for HDB rentals also marked a 0.3 per cent drop in February compared to January, dragged mainly by three and four-room flats. Rents dropped in both mature and non-mature estates in February, down 0.6 per cent and 0.1 per cent from a month ago.
Headwinds plaguing the residential leasing market will continue to put a cap on rents for private homes and HDB flats, consultants say.
"We expect overall rents to further decline by 6-8 per cent for the whole year as more new non-landed are slated for completion over the course of the year," said ERA key executive officer Eugene Lim.
Several negative factors are still in play, he added, citing a record number of private home completions, tighter inflow of expatriates into Singapore, a stringent property tax regime and a rising interest rate environment.
"Landlords are no longer allowed to apply for vacancy refund on their property tax should they be unable to rent out their units," Mr Lim said. "As interest rates are also on the rise, there is a sense of urgency for landlords to quickly secure their tenants to negate holding costs. Most may be prepared to accept a lower rental so as not to leave the unit vacant."
According to SRX's rental index, non-landed private residential units in Core Central Region (CCR) and Rest of Central Region (RCR) saw month-on-month rent declines of 1.2 per cent and 1.5 per cent respectively in February, while rents in Outside Central Region (OCR) stayed unchanged from January.
SRX revised the rental index for January, which now shows rents for non-landed private residential units unchanged from December 2014 instead of an earlier reported 0.2 per cent month-on-month rise in non-landed units in January based on flash estimates. SRX's flash estimate typically represents 60 per cent of transactions for the reported month.
R'ST Research director Ong Kah Seng noted that the leasing demand for private residential properties is usually stronger in the early part of the year, but the month of February was probably affected by the festive Chinese New Year season.
"Owners of newly completed condominiums are expected to cut rents significantly to secure tenants for the initial investment term of the first one to two years," he said. This could result in a narrowing of the rental premium for new properties versus the older properties.
Rental volumes declined in February. SRX estimates that 2,586 units were rented in February, a 25.8 per cent decrease from 3,487 units rented in January. Mr Lim of ERA pointed out that a majority of leasing activity was driven by relocations of existing tenants to better options rather than the inflow of new tenants.
At the same time, an estimated 1,371 number of HDB flats were rented in February, a 25.7 per cent decrease from 1,846 units rented in January, according to SRX.
Mr Ong believes that the better rental performance of five-room flats and executive flats in February, which saw a respective 0.7 per cent and 0.5 per cent month on month rise in rents, might be "a random occurrence" as smaller flats still offer better value for tenants.
As more flat owners move into newly completed condos and put up their HDB flats for leasing, the HDB flat rents are expected to dip in this year by up to 7 per cent, Mr Ong added.