http://www.businesstimes.com.sg/real...olume-says-srx

Condo rents fall in March on higher volume, says SRX

HDB rentals flat in March, but leasing volume also improved, likely from PR demand, says consultant

By Lee Meixian

[email protected]@LeeMeixianBT

16 Apr


RENTALS of private condominiums and apartments dipped 0.4 per cent in March compared to February amid a weak leasing environment. Those in the city centre and city fringe saw decreases in rents of 0.5 per cent and 0.9 per cent respectively. Rents in the suburbs rose 0.8 per cent, however.

This was according to flash estimates of the SRX Property Price Index for Non-landed Private Rentals released on Wednesday.

Year-on-year, rents in March 2015 were down 6.3 per cent from March 2014. The movement in rents in February has also been revised from a 0.8 per cent decrease to a 1.3 per cent decrease. But rental volume improved. According to SRX Property, about 3,948 non-landed private homes were rented in March 2015, up 37.1 per cent from 2,880 units in February. Year-on-year, rental volume in March 2015 rose 14 per cent from the 3,463 units rented in March 2014.

R'ST Research director Ong Kah Seng said: "More leases were signed in March, but rents fell on average. The fall shows that tenants will not relent to high asking rents by landlords, as they understand that generally there are more private residential properties completed in recent times."

ERA Realty key executive officer Eugene Lim added: "From 2014, landlords are also no longer allowed to apply for vacancy refunds on their property tax should they be unable to rent out their units. As interest rates are also on the rise, there is a sense of urgency for landlords to quickly secure tenants to negate their holding costs. Thus most may be prepared to accept a lower rental so as not to leave the unit vacant."

Consultants expect rents to fall 6-8 per cent for the whole of 2015, on the back of a record number of impending private home completions, contrasted against the tighter inflow of expatriates into Singapore and a reduced pool of big-budget tenants (a result of shrinking housing budgets). Transaction volume, however, may remain high, driven more by the relocation of existing tenants adjusting to their rental budgets, and less by the entry of new tenants, Mr Lim said.

As for public housing, HDB rentals were flat in March, inching up a marginal 0.1 per cent, according to SRX Property. Three and four-room flats both posted a 0.4 per cent increase in rents, while five-room and executive flats saw a 1.3 per cent and 1.8 per cent drop in rents, respectively. This is the first time HDB rental prices have stopped declining in seven months since August 2014, SRX Property said, but Mr Lim waved it off as a "one-off due to monthly fluctuations".

Year-on-year, HDB rents in March were down 3.5 per cent. Rents change in February has also been revised from a 0.3 per cent decrease to a 0.6 per cent decrease.

Meanwhile, HDB rental volume improved. About 1,838 HDB flats were leased in March, a 29.4 per cent increase from the 1,420 units rented in February.

"Demand is coming from newly-minted permanent residents who are not allowed to purchase resale HDB flats due to the three-year wait-out period. But the decline in private residential rents is keeping a lid on further price increases for HDB flat rents even though demand is strong," said Mr Lim.

Year-on-year, however, the rental volume in March is 3.8 per cent lower than the 1,910 units rented in March 2014. HDB rentals could fall 5-7 per cent for the whole year, consultants said.