Rents for private homes fare better than HDB flats

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Rents for private homes fare better than HDB flats

Published 12 May 2016

April slowdown within expectations, say experts; market also getting competitive

Rennie Whang


The rental market softened last month after a brief spurt in March when new leases signed for Housing Board flats and private apartments jumped by double digits in percentage terms from February.

This slowdown was well within expectations, given that the inflow of foreign professionals tends to be higher at the start of the year, especially just after Chinese New Year, experts noted.

Still, year on year, rental volume was higher for both segments - reflecting the changing nature of tenancies, where leases are as short as six months.

In terms of rental amounts, private apartment rents were unchanged last month after falling 1.4 per cent in March, while HDB rents fell 0.6 per cent after falling 0.4 per cent in March, according to flash estimates from SRX Property yesterday.

Both have been on a slide, owing to the rising number of home completions combined with little new demand from expatriates.

The flatness in private apartment rents last month was likely a compensation for the sharp decline in March, said Mr Alan Cheong, Savills Singapore research head. "The rental market has not been accelerating in its decline, but is falling in a 'sawtooth' pattern. This suggests the market is still rational, rather than going into a freefall where one would see constant or accelerating declines," said Mr Cheong.

Rents in the core central region (CCR) were unchanged from March, rents in the rest of the central region (RCR) rose 0.1 per cent and rents in the outside central region (OCR) or suburbs fell 0.1 per cent. Year on year, rents are 5.4 per cent lower overall. CCR rents are down 1.9 per cent; RCR rents are off 8.2 per cent and OCR rents are 6.8 per cent lower.

HDB rents are falling as tenants have many choices, with increased private condominium completions since 2014 and more HDB flats up for sublet as their owners upgrade, said Mr Ong Kah Seng, R'ST Research director.

HDB rents fell 0.3 per cent in the mature estates and were down by 0.9 per cent in the non-mature estates in April. Year on year, rents in mature estates were 3.9 per cent lower and those in non-mature estates 4.8 per cent lower.

Rising home completions boosted volumes, with more people moving to newer properties when their tenancies expire - some even ending their leases earlier, said Mr Lim Yong Hock, PropNex Realty key executive officer.

The number of private apartments rented out last month fell 10.3 per cent month on month to 3,953 but that was 10.5 per cent higher than a year back.

HDB rental volume fell 2.2 per cent from March to 2,048 but was 5.8 per cent higher year on year.

"Rents are getting very competitive. Any owners who try to keep to their previously transacted rents can be prepared to have difficulties renting out," Mr Lim added.

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http://www.businesstimes.com.sg/real...0-in-april-srx

Condo rents flat, rental volume slumps 10% in April: SRX

Rents unchanged in the city area, rise 0.1% in the city fringe and fall 0.1% in the suburbs

By Lee Meixian

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@LeeMeixianBT

R'ST Research said that rentals of private homes are still negatively affected by increased private residential completions, which intensify competition among landlords.

May 12, 2016


RENTALS of private condominiums and apartments were flat in April, compared with March. But rental volume fell 10.3 per cent to about 3,953 units in April, compared with 4,405 units in March.

Data released by SRX Property on Wednesday showed that when broken down by sectors, rents in the city area remained the same; those in the city fringe rose 0.1 per cent, while those in the suburbs experienced a decrease of 0.1 per cent.

R'ST Research director Ong Kah Seng said: "Many corporates across industries are downsizing headcounts or letting go of professionals due to cautious economic times. It is also unlikely in mid-year or from April onwards that we will see a significant increase in expatriates seconded to Singapore, which would lend boost to fresh leases."

He added that rentals of private homes are still negatively affected by increased private residential completions, which intensify competition among landlords.

Citing data from the Urban Redevelopment Authority, he said that in 2015, 18,971 private homes were completed; some 23,396 units are expected to be completed in 2016.

After that, 12,760 units are expected to come onstream in 2017, and another 10,019 units in 2018.

In lieu of the huge oncoming supply, Mr Ong expects average private home rentals to fall by about 5 per cent in 2016.

DTZ regional head (South-east Asia) of research Lee Nai Jia said: "The leasing market will be challenging as more private homes come on board ... The growth in foreign workers have moderated to about 2 per cent each year. Some firms have also shelved their expansion plans or consolidated, reducing the pool of rental demand.

"As landlords find it harder to replace their tenants, they become more flexible in their lease renewal terms. Looking ahead, rents are expected to fall by 2-5 per cent by year end, with rents in the suburbs declining even more.

"Leasing activity is expected to stay the same or moderate downwards, given the weaker macroeconomic outlook."

Year on year, rents in April were down 5.4 per cent from April 2015. They were also down 16.1 per cent from their peak in January 2013.

On the public housing front, HDB rents fell 0.6 per cent in April.

Year on year, rents in April 2016 were down 4.3 per cent from April 2015. They were down 9.9 per cent from their peak in August 2013.

HDB rental volume fell 2.2 per cent in April to about 2,048 HDB flats, from 2,093 units rented in March.