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Thread: Private, HDB rents fall as more condos are completed

  1. #1
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    Default Private, HDB rents fall as more condos are completed

    http://www.straitstimes.com/business...-are-completed

    Private, HDB rents fall as more condos are completed

    Nov 13, 2015


    Rents of private apartments and Housing Board flats both fell last month from September, but cheaper HDB rents should keep demand robust over coming months.

    Private apartment rents fell an estimated 0.4 per cent month on month after declining 0.3 per cent in September, according to SRX Property data out yesterday.

    They are now 5.7 per cent lower than a year back and 13.7 per cent below the January 2013 recent peak.

    This was well within expectations and due to rising home completions, said R'ST Research director Ong Kah Seng. A total of 13,150 private homes were completed in 2013; rising to 19,941 last year and a projected 18,977 homes for the whole of this year.

    "Tenants who recently are renewing their one-year leases are being offered similar rents, or reductions of 5 per cent or more. Those renewing a two-year lease are being offered a 5 to 12 per cent rental reduction," he said.

    Compared with October last year, private apartment rents in the core central region have fallen 2.9 per cent. Rents are down 3.5 per cent on the city fringes and down 8.3 per cent in the suburbs, where most of the new supply is coming onstream.

    Rental volume for private apartments fell 2.7 per cent to about 3,448 private apartments, in line with a seasonal slowdown towards the end of the year.

    On the HDB front, rents fell 0.5 per cent month on month. Rents were previously estimated to be unchanged in September but this was revised to a 0.1 per cent fall. HDB rents are now down 3.3 per cent from a year back and 7.2 per cent below its recent peak in August 2013.

    HDB rental volume fell 3 per cent to an estimated 1,602 units last month. But the HDB rental market is relatively more stable as support is coming from expatriates who are increasingly seeking HDB units, said ERA Realty key executive officer Eugene Lim.

    "They no longer have a separate budget for housing... Rental demand for HDB flats is quite strong, especially for the $2,500 and below segment."

    Thus, while the large supply of mass market condos should push such rents down and, therefore, also put pressure on HDB rents, many will still prefer the more affordable HDB rents, he noted.

    For example, a family with a monthly housing budget of less than $3,000 may want a three-bedroom unit. Looking at the West Coast area, such condo units would start from about $3,500; but they could rent a five-bedroom HDB in the area for about $2,500 to $2,800 monthly.

    Thanks to such demand, HDB rents have moderated to a lesser degree. "There is a certain baseline for HDB rents, where they should not go down further," he said.

    Rennie Whang

  2. #2
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    Default Residential rents slip further in October: SRX

    http://www.businesstimes.com.sg/real...in-october-srx

    Residential rents slip further in October: SRX

    Property consultants say the increase in private home completions has intensified competition among landlords

    By Lynette Khoo

    [email protected]

    @LynetteKhooBT

    Nov 13, 2015


    THE residential leasing market remained in a soft patch in October, with rents and transaction volumes for both private homes and HDB flats still on the slide.

    Flash estimates from SRX Property show that rents of non-landed private residential units slipped 0.4 per cent in October from the preceding month, while HDB rents slipped 0.5 per cent. The declines were steeper than the 0.3 per cent and 0.1 per cent respective falls in September.

    While there is the seasonal factor - the second-half of the year is a weaker period for leasing activities - property consultants note that the stronger factor has been an increase in private residential completions that has intensified competition among landlords.

    R'ST Research director Ong Kah Seng said: "Islandwide, there were 10,329 private residential units (landed and non-landed) which received their TOPs (temporary occupation permits) in 2012 and 13,150 units which TOP-ed in 2013. It rose to 19,941 units which TOP-ed in 2014. From Q1 to Q3 2015, 13,589 private residential units were completed; and a total of 18,977 units are expected to be completed in whole of 2015."

    ERA Realty key executive officer Eugene Lim noted that the downward rental pressure on the Outside Central Region (OCR) was the strongest as the majority of the non-landed private residential projects are located in the suburban areas.

    More than 9,000 private residential units have been completed in the OCR in the first nine months of this year. This is close to the 10 year average annual number of completions of 10,863 units in the entire Singapore, Mr Lim flagged.

    In October, rents for private condos in both the Core Central Region (CCR) and OCR fell 0.8 per cent from a month ago, according to SRX Property estimates. City-fringe condos or those in the Rest of Central Region, however, marked a 0.4 per cent month-on-month improvement in rents in October.

    Mr Ong noted that there is shrinking requirements for even senior expatriates holding strategic regional portfolios to occupy a luxury residential unit in Singapore, and many are contented with renting an average-size CCR unit of at most 1,500 square feet, or even apartments in niche city-fringe locations, since they are often travelling.

    Compared with a year ago, rents of private condos in October were down 5.7 per cent while rents for HDB flats were down 3.3 per cent.

    Three and four-room HDB flats marked month-on-month declines of 0.5 per cent and 1.2 per cent in rents respectively, while five-room flats and executive flats posted rental increases of 0.1 per cent and 1.1 per cent respectively.

    Leasing volumes also weakened, with transactions for private condos contracting by 2.7 per cent month on month to an estimated 3,448 units in October, though this was 9.4 per cent higher than in October 2014. Rental transactions for HDB flats contracted 3 per cent month on month in October to an estimated 1,602 HDB flats. They were down 7.8 per cent from October 2014.

    "Although rental volume decreased both monthly and year on year, it is our belief that demand is still strong in the HDB leasing market," Mr Lim said. "As more private condominium projects are completed, owners of multiple homes would usually choose to let out their HDB flat for a higher rental yield. As HDB flats have lower rents and sometimes superior locations, they are sought after by many tenants."

    But depressed leasing conditions in the private residential market will also weigh down on the HDB market, he added. Due to stiffer competition, HDB rents are expected to come under increased pressures.

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