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reporter2
23-07-15, 19:34
http://www.straitstimes.com/business/property/leasing-woes-for-private-non-landed-public-housing

Leasing woes for private non-landed, public housing

Jul 16, 2015

Ann Williams


Latest data showed that the leasing market remained anaemic in both the private non-landed and public housing markets.

Rents for private condominiums and apartments edged down 0.5 per cent last month compared with May, according to flash estimates released yesterday by SRX Property.

Year on year, rents last month were down 6.5 per cent from June last year, and are 12.4 per cent lower since their peak in January 2013. They have, in fact, been falling every month since then, with one exception in January this year.

Rents in May have been revised from a 0.6 per cent decrease to a 0.8 per cent drop. Rents in the city and suburban areas declined by 0.8 per cent and 0.7 per cent, respectively, while those in the city fringe areas saw no change.

Property agency ERA blamed the falling rents on "stiff competition for a limited pool of tenants as more private residential units are completed". Meanwhile, rents at Housing Board flats last month inched up by 0.1 per cent from May. However, they were down 1.8 per cent compared with the same month last year.

Executive director of property consultant SLP International Nicholas Mak said that the supply of both private and public housing units for lease has been outpacing demand this year.

He pointed out that about 21,800 new private homes will be completed this year, 84 per cent higher than the annual average supply of 11,865 units in the past five years from 2010.

"As a result of this mismatch in supply and demand, the vacancy rate is expected to rise from 7.8 per cent at the end of last year to 9.6 per cent at the end of this year.

"In addition, further downward pressure on rental rates for private housing is expected for 2015 and 2016." said Mr Mak.

SRX Property's data showed that rental volume of non-landed private homes rose slightly last month, with 3,777 units rented out, 1 per cent up from the 3,739 units in May.

On a year-on-year basis, rental volume last month was 15.4 per cent higher than the 3,273 units for June last year.

ERA credited the rise in rental volume not to new demand but, rather, to existing tenants moving to get better quality units or cheaper rents.

It said: "Over the last two years, we have seen increasingly more tenants signing 12-month leases rather than the traditional 24 months. They have been doing so because rents are on the decline due to the supply glut as more and more new units are being completed.

"Moving forward, we are likely to see rental volumes remaining robust for the rest of the year as tenants continue to play the 'musical chairs' game."

reporter2
23-07-15, 19:37
http://www.businesstimes.com.sg/real-estate/weak-residential-leasing-persists-in-singapore

Weak residential leasing persists in Singapore

Condo rents down 0.5 per cent, HDB rents up 0.1 per cent in June, says SRX

By Lee Meixian

[email protected]@LeeMeixianBT

Jul 16, 2015


THE residential leasing market stayed weak in June as a huge supply of condo units continued to jostle for a limited pool of tenants - a trend that consultants say will not let up, with a record number of condo projects to be completed these two years.

SRX Property said rents for private condos and apartments fell 0.5 per cent in June from the month before; these were led by a 0.8 per cent drop in rents in the city, and a 0.7 per cent drop for those in suburban areas. Rents in the city-fringe areas were unchanged.

Year on year, rents in June were down 6.5 per cent from June last year, and down 12.4 per cent from their peak in January 2013.

Meanwhile, rents in May have been revised from a 0.6 per cent decrease to a 0.8 per cent decrease.

Transactions wise, rental volume rose slightly. A total of 3,777 units were rented in June, 1 per cent more than the 3,739 units rented in May.

Year on year, rental volume in June was 15.4 per cent higher than the 3,273 units rented in June 2014.

Eugene Lim, key executive officer at ERA Realty, was intrigued by the double-digit year-on-year growth.

"However, we do not attribute the rise in volume to new demand, but rather that tenants are moving for better-quality or lower rents."

He noted, too, that in the last two years, more tenants have signed 12-month leases rather than the traditional 24-month ones, with bargaining power having returned to their hands - especially those whose landlords are trying to keep them.

"Going forward, we are likely to see rental volumes remain robust for the rest of the year, as tenants continue to play musical chairs," he added.

Weak private residential leasing has had a trickle-down effect on HDB rents, but HDB rents managed to reverse the downward trend slightly by inching up a slight 0.1 per cent in June from May.

HDB three- and five-room flats posted a 0.3 per cent and 1.2 per cent increase in rents respectively; four-room and executive flats both recorded a 0.5 per cent drop in rents.

Year on year, rents in June were down 1.8 per cent from June 2014, and down 6.1 per cent from their peak in August 2013.

Mr Lim from ERA said he expects HDB rents to continue their marginal decline as long as the downward pressure persists in the private residential market.

Meanwhile, rents in May have been revised from no change to a 0.4 per cent decrease.

Transactions wise, HDB rental volume was flat in June.

That month, 1,902 flats were rented, steady from the 1,900 units rented in May.

Year on year, rental volume in June was 14.2 per cent higher than the 1,665 units rented in June 2014.

HDB rental transactions have held up so far, thanks to a strong base of tenants with monthly accommodation budgets of S$2,500 or less, said Mr Lim.

HDB rental transactions will hold up as long as rents for family-sized condo units do not fall below that point, he added.

Three-room units in newer condos are still leasing for S$3,000 to S$3,500 a month.