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Thread: Drop in Private property rental

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    Default Drop in Private property rental

    With a growing number of senior executives from the expatriate community leaving Singapore, some prime locations are seeing a drop in asking rentals.

    Based on data compiled by The PropertyGuru, the most notable fall in median asking rental prices was seen in District 4 (Harbourfront / Telok Blangah), recording a significant 15 percent decline from a median price of S$7,900 in Q4 2011 to a median price of S$6,700 in Q1 2012. Coming in second is District 19 (Hougang / Punggol / Sengkang), which saw a 13 percent fall from a median price of S$4,000 at the end of last year to a median price of S$3,500 in Q1 2012.

    In addition, asking rental prices in Districts 2 (Chinatown / Tanjong Pagar) and 18 (Pasir Ris / Tampines) both declined by eight percent while Districts 22 (Boon Lay / Jurong / Tuas) and 25 (Admiralty / Woodlands) were down seven and six percent respectively.

    While the data is solely based on asking rental prices (PropertyGuru does not track actual transacted prices), the subdued expectations regarding rentals is an indication that global economic concerns are taking their toll on the market. According to a source, companies are either hesitant to hire or are holding back on employment packages for their existing foreign staff. *

    Tejaswi Chunduri, Regional Analyst at PropertyGuru, said the “prime districts might be largely affected as the rental market here is dominated by expats who come to Singapore on expatriate packages with hefty housing allowances from MNCs (multinational companies).”

    She noted that housing allowances, which form part of the expatriate packages for foreigners, are one of the major drivers of Singapore’s rental market, particularly in the luxury segment, but this has now changed with the drop in expat numbers.

    “It was a different story last year,” according to Ella Sherman, a property consultant with Premiere Realty, who told The PropertyGuru that there were a fair number of expats relocating here with high rental allowances just twelve months ago.

    “However, it appears that many major corporates, most notably the banking and finance sector, have reduced their housing allowances and staff are having to take personal leases,” she noted.

    Commenting on the 15 percent drop in asking rentals seen in District 4, Sherman said that expatriates were the main drivers of growth in the area, particularly in Sentosa. However, the decrease in rental values is another sign that “there are more expatriates leaving than coming in”.

    The strict immigration policies implemented by the government last year may be another reason behind the falling prices, with the population growing at a slower pace.

    “At the same time, with a large supply of completed homes attaining their TOP (Temporary Occupation Permit) this year, those who were renting can now start occupying their places. This affects demand in the rental market and hence prices,” according to Chunduri.

    However, not all the districts are seeing price falls, with some faring better. In fact, District 9 (Orchard / River Valley) has seen a strong 14 percent rise in rentals, from a median price of S$6,400 in Q4 2011 to a median price of S$7,300 in Q1 2012.

    Sherman explained that this may be due to the sizeable number of new developments in Orchard Road which has left renters “spoilt for choice”. They also offer a convenient location, she added, as many residents prefer to live near the CBD to avoid the hassle of traffic jams during peak hours.

    She was also quick to note that foreign renters remain a significant player in the rental market and she still receives queries, mostly from Americans, the British and Australians.

    On the other hand, European interest has stalled. “This time last year I had a steady flow of queries from Europeans,” she noted. “But they're very quiet at the moment. I assume the dire economic issues with the Eurozone have resulted in European companies keeping their costs down and not seconding as many staff overseas for now.”

    Moving forward, Sherman predicts that if expats continue to lose their jobs and are repatriated back home, “the rental market will be negatively impacted”.

    “The same goes for the decline in the numbers of expatriates being sent on assignment to Singapore,” she added.
    Last edited by hovivi; 14-04-12 at 09:38. Reason: Clarity

  2. #2
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    This article is from where?

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    Quote Originally Posted by minority
    This article is from where?
    Propguru....

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    Quote Originally Posted by carbuncle
    Propguru....
    http://www.propertyguru.com.sg/prope...vate-property-

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    It boils down to location even within the same district.

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    I feel D4 decline is an indication of things to come due to massive completions from 2012

    Im this case Reflection 1000+ units TOP'ed in Dec

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    Reflection is only convenient to certain group of people. Those with cars or use a lot of the taxis. Expats use bus or trains may not have the $ capability to rent.
    Quote Originally Posted by hovivi
    I feel D4 decline is an indication of things to come due to massive completions from 2012

    Im this case Reflection 1000+ units TOP'ed in Dec

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    From my own personal observations, rental has indeed been inching downwards.

    The reason is simple : There are more units TOP-ing compared to additional number of expats coming to Singapore.

    With the cheong-ing in 2008-2010, its time people realise that vacancy rates will start to climb! I wonder who can provide this simple information :

    Number of units receiving TOP last quarter vs Net number of expats added to Singapore.

    With this, I think it will be obvious that rental market in this and next quarter is going to be strained. Just look at some recent TOP ones like One Devon. After 4-5 months, I think it is still more than 70% empty.

    Soon they will have to lower their prices and try to poach the tenants from nearby condos ( dont need me to name them right?).

    We shall wait and see if government is really acting consistently with their promises of fewer expats. We cannot discount the fact that after a few months, they open the floodgate again! And let our population hit 7 million !

    Good Luck!
    DKSG
    PS : Me not vested or looking for vested (at this moment - haha!).

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    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?

    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!

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    Quote Originally Posted by DKSG
    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?

    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!
    Well some insist theirs are special. Cox got malls n condo n mrt. So won't happen!

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    I shared this before, but many people say I sour grapes! They say OCR's price will rise to become no difference from CCR, where got such difference one? In fact, many people will prefer living in OCR to be beside HDB flats, the malls there are also so cosy (i.e. packed and cramped so that they can touch here touch there for free) etc etc. Somebody say he can drive from West Coast to Raffles Place within 10 mins!

    I am afraid your sharing will be left to deaf ears. Never mind, at least we already shared!


    Quote Originally Posted by DKSG
    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?

    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!

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    Quote Originally Posted by teddybear
    I shared this before, but many people say I sour grapes! They say OCR's price will rise to become no difference from CCR, where got such difference one? In fact, many people will prefer living in OCR to be beside HDB flats, the malls there are also so cosy (i.e. packed and cramped so that they can touch here touch there for free) etc etc. Somebody say he can drive from West Coast to Raffles Place within 10 mins!

    I am afraid your sharing will be left to deaf ears. Never mind, at least we already shared!
    Generally agree, though also depends on which parts of the CCR you are talking about. Bt Timah stretch always kena jammed big time. Driving from shelford area to cityhall took me 35mins this morning, even on a Sat! Huge traffic congestion... Unbelievable...

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    Quote Originally Posted by teddybear
    I shared this before, but many people say I sour grapes! They say OCR's price will rise to become no difference from CCR, where got such difference one? In fact, many people will prefer living in OCR to be beside HDB flats, the malls there are also so cosy (i.e. packed and cramped so that they can touch here touch there for free) etc etc. Somebody say he can drive from West Coast to Raffles Place within 10 mins!

    I am afraid your sharing will be left to deaf ears. Never mind, at least we already shared!
    West coast to raffles place in10 mins? Who said that?

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    Quote Originally Posted by Poloclub
    West coast to raffles place in10 mins? Who said that?
    It depends on how aggressive you drive, the route and it must be off-peak before 7.30am or after 7.30pm along the stretch. I wasn't the person to state the 10 min, but let me try to discuss this based on my driving.

    Distance from Clementi Road junction at West Coast is about 11 km (measured on map) to Raffles Place MRT using West Coast Highway. If you can manage just above 60km/h on average, it takes about 10 min. To be safe, I would put 15 min for start of journey before 7am.

    If the route is to AYE to Raffles Place, the distance would be 12 km. Assuming start of journey before 7am, 10 min might be achievable. The speed from West Coast to end of AYE near Keppel can be done way above 100 km/h during off-peak.

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    Quote Originally Posted by Poloclub
    West coast to raffles place in10 mins? Who said that?
    Notwithstanding jams and what not on the expressway, it seems whoever think is possible conveniently forgot there are traffic lights at both ends of route... Unless the stay by the roadside of the expressway...

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    Quote Originally Posted by DKSG
    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?

    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!
    My studio 500sf beside city square mall was indeed rented for 2k in 2008....

  17. #17
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    Quote Originally Posted by DKSG
    From my own personal observations, rental has indeed been inching downwards.

    The reason is simple : There are more units TOP-ing compared to additional number of expats coming to Singapore.

    With the cheong-ing in 2008-2010, its time people realise that vacancy rates will start to climb! I wonder who can provide this simple information :

    Number of units receiving TOP last quarter vs Net number of expats added to Singapore.

    With this, I think it will be obvious that rental market in this and next quarter is going to be strained. Just look at some recent TOP ones like One Devon. After 4-5 months, I think it is still more than 70% empty.

    Soon they will have to lower their prices and try to poach the tenants from nearby condos ( dont need me to name them right?).

    We shall wait and see if government is really acting consistently with their promises of fewer expats. We cannot discount the fact that after a few months, they open the floodgate again! And let our population hit 7 million !

    Good Luck!
    DKSG
    PS : Me not vested or looking for vested (at this moment - haha!).
    Good post bro. Any reason to believe the FT floodgates will reopen soon?

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    Quote Originally Posted by Poloclub
    West coast to raffles place in10 mins? Who said that?
    Possible..y not? take the pasir panjang flyover..u reach RP within sub 10min

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    Quote Originally Posted by carbuncle
    Notwithstanding jams and what not on the expressway, it seems whoever think is possible conveniently forgot there are traffic lights at both ends of route... Unless the stay by the roadside of the expressway...
    If you are living at Varsity Park, you can actually get to Raffles Place in around 15 mins.

    Quickest way is AYE CTE exit at Merchant Road, which will take you around 10-15mins even during morning traffic.

    The other option (without ERP) is West Coast highway, AYE (at Keppel Flyover), Lower Delta Road, Jalan Bukit Merah, CTE, exit Merchant Road.

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    Quote Originally Posted by DKSG
    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?

    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!
    yes captain i hear you loud n clear but NOT the tens of thousands of people flocking to buy in punggol...

  21. #21
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    Quote Originally Posted by DKSG
    Another thing about rentals.

    If you are buying a Punggol unit (or similar) in hope of renting it out, please think very very hard again and again.

    When times are good, there is shortage, then its ok.

    When times are bad, when units in Central starts to slash prices, u maybe left without a tenant for a loooong time.

    It is easy for Central to slash prices, say $2K for studio in town! Or even $1.5K. Got rental better than no rentals right ?

    By then, those OCR can only fight back with ... $800 ?


    Think my friends, think!

    DKSG
    Stay Calm and Cool

    PS : I know this because I kanna before, so sharing this with you --> for FOC!
    Lets do some math here:
    A mm in CCR, probably cost ard 9xxk to 1 mil (eg espada), after 40% payment, outstanding loan left 600K, monthly instalment 2.4k(with 30 yr tenure, 1.1% interest rate)

    A mm in OCR (use WT since you mention punggol) cost ard 570k, after 40% payment, outstanding loan 340k, monthly instalment ($800 with 30 yr tenure, 1.1 interest rate)

    If go by your logic, CCR mm rental slash price until 2K, then CCR MM unit owner has a deficit of: 2k(rental) - 2.4k (installment) = -$400.
    and OCR mm rental slash until $800 per month. then OCR mm owner ($800 instalment -800 rental = $0, no deficit)

    Please enlighten me which one more fatal in bad times.

    PS: Thanks for sharing your thoughts. As you mentioned, you kenna before, I would be very interested to know which project you are vested before and which one you kenna before. I'm curious because I never kenna before and I cash out a few times from OCR with some gain. Thanks in advance for your views. Hope to learn from each other.
    Last edited by Xan; 15-04-12 at 15:56.

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    Quote Originally Posted by Xan
    Lets do some math here:
    A mm in CCR, probably cost ard 9xxk to 1 mil (eg espada), after 40% payment, outstanding loan left 600K, monthly instalment 2.4k(with 30 yr tenure, 1.1% interest rate)

    A mm in OCR (use WT since you mention punggol) cost ard 570k, after 40% payment, outstanding loan 340k, monthly instalment ($800 with 30 yr tenure, 1.1 interest rate)

    If go by your logic, CCR mm rental slash price until 2K, then CCR MM unit owner has a deficit of: 2k(rental) - 2.4k (installment) = -$400.
    and OCR mm rental slash until $800 per month. then OCR mm owner ($800 instalment -800 rental = $0, no deficit)

    Please enlighten me which one more fatal in bad times.

    PS: Thanks for sharing your thoughts. As you mentioned, you kenna before, I would be very interested to know which project you are vested before and which one you kenna before. I'm curious because I never kenna before and I cash out a few times from OCR with some gain. Thanks in advance for your views. Hope to learn from each other.
    Hey. You forgot to add that the downpayment for 1 CCR can buy 2 OCR MM, and the monthly installment for that 1 CCR can pay for 3 OCR ones

  23. #23
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    if $800 monthly instalment for 340K loan, then shouldn't it be <S$1.6K for 600K loan ??...

    my nokia phone calculator gives $1109 for 340K loan, and $1958 for 600K loan...

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    Quote Originally Posted by carbuncle
    Hey. You forgot to add that the downpayment for 1 CCR can buy 2 OCR MM, and the monthly installment for that 1 CCR can pay for 3 OCR ones
    No worries. I can forgo that.
    I am trying to do a fair comparison between the two (CCR vs OCR mm).
    With interest rate, tenure, downpayment all remain constant, and also assuming both in bad times. (But dont come and tell me CCR confirm can rent out in bad times while OCR cannot because it is ulu)

    Btw whats the definition of ulu?
    Ulu to me is somewhere when it is not accessible/reachable by public transport.
    (Example, Jalan Tua Kong at siglap to me is ulu because it is too deep in to the extent I need to walk 10 mins to reach a bus stop.)
    Maybe to some people, OCR is ulu and only CCR or RCR is not ulu, without even studying the location. Diff people have different definition of ulu.

    Since everyone here keep saying if CCR rental slash, then OCR will be even more jialat.
    But the question is, Did we do our due diligence in calculating the math?

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    Quote Originally Posted by ikan bilis
    if $800 monthly instalment for 340K loan, then shouldn't it be <S$1.6K for 600K loan ??...

    my nokia phone calculator gives $1109 for 340K loan, and $1958 for 600K loan...
    I dont know how you get that figure, but I'm paying ard $800 for my monthly installment for WT mm. Or probably I cannot use 570K for mm in WT. In actual fact, I'm paying 550K for WT after all the rebates.
    But nvm, 550k or 570k to me not much diff.

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    Did you see massive jam in the morning from the bridge all the way to the entrance from NUS? Fortunately, I was travelling in the opposite direction.
    Quote Originally Posted by Juniper
    If you are living at Varsity Park, you can actually get to Raffles Place in around 15 mins.

    Quickest way is AYE CTE exit at Merchant Road, which will take you around 10-15mins even during morning traffic.

    The other option (without ERP) is West Coast highway, AYE (at Keppel Flyover), Lower Delta Road, Jalan Bukit Merah, CTE, exit Merchant Road.

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    Quote Originally Posted by ikan bilis
    if $800 monthly instalment for 340K loan, then shouldn't it be <S$1.6K for 600K loan ??...

    my nokia phone calculator gives $1109 for 340K loan, and $1958 for 600K loan...
    Dont forget you cannot interpolate by this way.
    The more loan you borrow, the more interest amt you incurred.

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    Does it mean rental of a 4HDB at nearby location may become $800? Which will tenant choose?
    Quote Originally Posted by Xan
    Lets do some math here:
    A mm in CCR, probably cost ard 9xxk to 1 mil (eg espada), after 40% payment, outstanding loan left 600K, monthly instalment 2.4k(with 30 yr tenure, 1.1% interest rate)

    A mm in OCR (use WT since you mention punggol) cost ard 570k, after 40% payment, outstanding loan 340k, monthly instalment ($800 with 30 yr tenure, 1.1 interest rate)

    If go by your logic, CCR mm rental slash price until 2K, then CCR MM unit owner has a deficit of: 2k(rental) - 2.4k (installment) = -$400.
    and OCR mm rental slash until $800 per month. then OCR mm owner ($800 instalment -800 rental = $0, no deficit)

    Please enlighten me which one more fatal in bad times.

    PS: Thanks for sharing your thoughts. As you mentioned, you kenna before, I would be very interested to know which project you are vested before and which one you kenna before. I'm curious because I never kenna before and I cash out a few times from OCR with some gain. Thanks in advance for your views. Hope to learn from each other.

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    Anyway, whether it is 2k installment or 2.4k installment for CCR is not the main point.
    The main point is, the monthly installment for an CCR is twice the amt of OCR.
    Imagine in bad times, when both CCR and OCR cannot rent out, CCR owners need to pay 2k installment every mth while OCR owners need to pay ard 1k installment every mth.

    So, who is more fatal?

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    Quote Originally Posted by DC33_2008
    Does it mean rental of a 4HDB at nearby location may become $800? Which will tenant choose?
    Bro, I cant answer you. There are different people with different needs.
    Some go for lifestyle/facilities, some go for space.
    I drive to Sky habitat just now, also cannot understand why can pay 1700psf for bishan surrounded by mosque, ITE, CC and old HDBs.
    But I cannot say these buyers are carrots. Maybe they see something I cannot see.

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