0.4% drop in private apartment rents in August

[reporter2]

0.4% drop in private apartment rents in August

Sep 14, 2017

SRX Property data suggests market has yet to find a bottom

Ann Williams


Rents of private non-landed homes in Singapore dropped 0.4 per cent in August compared to July, while rental volume fell by 10.4 per cent, going by flash estimates from SRX Property yesterday.

The latest data seems to suggest that the private rental market has not yet found a bottom and rental weakness may persist till next year.

Year on year, rents in August were down by 2.5 per cent from the same period last year.

Rents softened across all areas, falling 3.5 per cent in the city centre, 2.3 per cent in the city fringe and 2.1 per cent in the suburbs. Against their peak in January 2013, rents of private homes were down 19.2 per cent in August.

Consultants say the mismatch between supply and demand will continue to weigh on the rental market. This year will see around 16,400 private homes being completed - almost double the expected number of completions each in 2018 and 2019.

Dr Lee Nai Jia, head of research at Edmund Tie & Company, said overall rents are likely to be stable, although rents in some districts which saw new completions will remain weak.

"Notwithstanding, it is likely that there is rental growth in certain pockets of Singapore. For instance, rental demand in the Buona Vista area should remain strong, supported by the demand for talent in the R&D and new disruptive sectors operating there," he noted.

Last month also saw a 10.4 per cent drop in the number of private units rented out - to 4,271 from 4,766 in July.

Dr Lee said last month's fall in rental volume was likely to be seasonal and in line with international schools' academic calendar.

"Most of them start their term in August, hence most expatriates will settle down in their new homes a month before school starts," he said.

Rental volume was 5.6 per cent lower than the 4,524 units leased out in the same month last year.

SRX Property data also shows overall rents for Housing Board flats to be unchanged last month, although rental volume dropped 6.4 per cent. This comes after the price decline for July was revised down from 0.1 per cent to 0.3 per cent.

Rents in the mature estates dipped by 0.2 per cent, while those in newer estates edged up by the same amount.

Rents for HDB flats last month were down by 3.8 per cent from a year ago. Year to date, they are down by 1.3 per cent. Compared to their peak in August 2013, HDB rents are 13.8 per cent lower.

The number of HDB flats rented out fell by 6.4 per cent to 1,658 from 1,772 in July.

Year on year, their rental volume was 7.5 per cent lower.

[reporter2]

Private home rentals slip 0.4% in Aug: SRX

Number of condo and apartment units rented in Aug down 10.4% from July; larger supply of about 16,500 new completions entering the market this year expected to ease rents

Sep 14, 2017

Lee Meixian


PRIVATE residential rents in Singapore fell 0.4 per cent in August after rising 0.2 per cent in July, while rental volume fell 10.4 per cent.

The general trend of private home rentals has been a gentle downward slope; year-to-date, the price index is down 0.4 per cent from the start of this year, executive director of ZACD Group Nicholas Mak noted.

He said this is not surprising given the larger supply of about 16,500 new completions entering the market this year, nearly double the 8,400 due to come onstream in 2018. This would have the effect of easing rents.

According to flash estimates released by SRX Property on Wednesday, 4,271 private condominium and apartment units were rented in August, 10.4 per cent lower than the 4,766 units rented in July.

Year-on-year, the rental volume in August 2017 was also 5.6 per cent lower than the 4,524 units rented in August 2016.

Mr Mak thinks that rental volume could rise slightly going forward, as existing tenants in affected en bloc developments find new abodes.

SRX Property data showed that rentals in the Core Central Region (CCR) and Outside Central Region (OCR; the suburbs) fell by 0.7 per cent and 1.1 per cent respectively, while those in the Rest of Central Region (RCR; the city-fringe) rose by 0.7 per cent.

Lee Nai Jia, head of research at Edmund Tie and Company, said he anticipates overall rents to be quite stable going forward, and in certain pockets of Singapore, to be even growing.

"For instance, rental demand in the Buona Vista area should remain strong, supported by demand for talent in the research and development and new disruptive sectors operating there.

"The RCR region seems to be quite resilient, as some expatriate workers are willing to move slightly from the CCR region, given that most have a smaller budget for accommodation.

"There is also not much new supply coming up in the RCR region, compared to OCR region. Some areas that saw strong rental demand include places like Farrer Park and the Katong district which offer attractive cultural and lifestyle options."

On the public housing front, HDB rents remain unchanged in August, after slipping 0.3 per cent in July.

Year-on-year, HDB rents in August 2017 were down by 3.8 per cent from August 2016; year-to-date, the rental price index has declined by 1.3 per cent from January 2017.

HDB rental volume fell 6.4 per cent to about 1,658 flats in August, compared to 1,772 units in July. Year-on-year, the rental volume in August 2017 was also 7.5 per cent lower compared to August 2016.