http://www.businesstimes.com.sg/arch...table-20130115

Published January 15, 2013

Private home rentals seen remaining stable

Analysts expect rental demand for HDB flats to be firm

By ong chor hao


[SINGAPORE] Private property rentals are likely to remain stable as the latest property cooling measures take effect, analysts have said.

The pool of potential buyers may be shrunken by measures such as a greater minimum upfront cash required from second-time and subsequent home buyers, a higher additional buyer's stamp duty and tighter loan-to-value (LTV) limits on individuals with one or more outstanding housing loans, said Chia Siew Chuin, the director of research and advisory at Colliers International.

She added: "The residential sector curbs may benefit the rental market, as those who are priced out or who withhold their buying decisions, particularly the permanent residents, would probably turn to the leasing market instead."

Ong Kah Seng, the director at R'ST Research, agreed broadly, calling the measures "fairly positive" for the rental market.

But he does not expect a corresponding rise in rentals.

He said: "The positive impact is in terms of providing stability for rentals, instead of rentals seeing marginal declines, I think rents will be able to hold for this year."

Trading volumes should be healthy, given the demand, analysts said.

Eugene Lim, key executive officer at ERA Realty, expects the market for units with rents at or below $6,000 a month to be more active.

Colliers' Ms Chia said the leasing market is not expected to change significantly.

Rentals for private non-landed homes in the fourth quarter of 2012 had slipped one per cent from the previous quarter, data from the Singapore Real Estate Exchange showed on Friday.

Market watchers said other factors may apply downward pressure on prices and rents over the next two to three years, such as a cautious economic outlook and a strong pipeline of projects near completion.

Donald Han, special adviser at HSR Property Group, said: "So I think if you are looking into the next 12 months, especially into 2014 ... we will be looking at a slight softening, compared to what we have been seeing in the last three to four years."

ERA's Mr Lim said the latest round of property measures has made sellers and buyers more realistic. All parties are more willing to negotiate now and this will translate itself to the rental market; landlords may accept lower bids than they used to demand.

As for the public housing rental market, R'ST's Mr Ong expects demand to remain firm, and rentals to grow about 3 per cent for the year.

ERA's Mr Lim, referring to the measure that now bars PRs from subletting the entire flat they own, said this will keep supply constrained, and may inevitably push rentals upwards.