Rents for private flats down 0.4% last month

[reporter2]

http://www.straitstimes.com/business...-04-last-month

Rents for private flats down 0.4% last month

Aug 12, 2016


Rents for private non-landed homes dipped by 0.4 per cent last month compared with June, while those for HDB flats inched up 0.5 per cent, according to flash estimates from SRX Property out yesterday.

SRX also revised down its estimate private non-landed units for June's month-on-month change from flat to a 0.1 per cent decrease.

Year on year, July rents of condominiums and other private apartments are down by 4.8 per cent from July 2015.

Rents in the prime districts held up better, dipping 1.6 per cent, while those in the city fringe and outside the central region fell by 7 per cent and 6.3 per cent respectively. In terms of rental transactions, SRX estimates that volumes fell by 5 per cent to 4,100 non-landed units, which represents a 3.4 per cent decline from June last year.

As for HDB rents, the rental rise was due to three- and four-room flats, which posted growth of 1.3 per cent and 0.8 per cent respectively.

Five-room and executive flats saw rental declines of 0.8 per cent and 0.4 per cent respectively.

HDB rental volume in July fell 6.1 per cent from June to 1,653 transactions, and was down 10.3 per cent from a year ago, said SRX.

[reporter2]

http://www.businesstimes.com.sg/real...nts-condos-srx

Continued slide in rents for private apartments, condos: SRX

Leasing market dragged down by suburban region while competition intensifies with completions

By Lynette Khoo

[email protected]

@LynetteKhooBT

Aug 12, 2016


RENTS for non-landed private homes in Singapore remained on a slide in July with the main drag coming from the suburban region, based on estimates by SRX Property.

On the 0.4 per cent decline in rents from a month ago, R'ST Research director Ong Kah Seng noted that the leasing market is still affected by the prolonged effects of more completions, as that intensifies competition among landlords.

"Any monthly rental increases, or flattish rents are therefore random occurrences or blips, and not sustainable," he said. "We usually will see a month's flattish rentals followed by rental reverting to negative territory in the following month."

Evidently, SRX Property revised June's flash estimate for rents in non-landed homes from flat to a 0.1 per cent decrease after factoring in more transactions recorded.

The general leasing trend will be characterised by "flattish, muted volumes and weak rental performance" going forward, Mr Ong said.

The same can be said for public housing, with HDB flat rents likely to fall by up to 5 per cent this year, after a 4 per cent drop in 2015, Mr Ong said, attributing this to more flats being put up for rent as more flat owners move into newly completed suburban condominiums.

This is despite a 0.5 per cent uptick in rents for HDB flats in July from June shown in SRX Property's flash estimate, after five straight months of decline. Rental increases for smaller HDB flat types on a month-on-month basis outweighed the declines in larger flats in July.

From the peak of January 2013, rents for private non-landed homes were down 16.9 per cent as of July; HDB flat rents were still 9.6 per cent below the peak in August 2013, according to SRX Property.

Rental volumes for non-landed private homes and HDB flats fell 5 per cent and 6.1 per cent respectively in July compared to June, to current estimates of 4,100 private non-landed units and 1,653 HDB flats.

Such monthly rental volume estimates are susceptible to subsequent revisions. Flash reports on rentals by SRX Property typically capture around 80 per cent of the month's transactions on average at the time of the report's publication.

Volume estimates for transactions not yet captured are based on the estate agencies' historical submission pattern and timeline, taking into account seasonal periods during the year. The algorithm also filters out room rentals to reflect only full flat rentals. These volume estimates are subsequently revised as more actual transactions are recorded.

Lee Nai Jia, head of research for South-east Asia at Edmund Tie & Company (SEA), noted that seasonally, the residential leasing market is most active from March to August.

"With due respect to SRX's algorithm and methodology, monthly leasing volume tends to be volatile and seasonal and there may be too much noise to analyse the trend of the market. Based on ground sentiments, we find the leasing activity to be largely the same as last year."

Dr Lee also noted that landlords have become flexible in a highly competitive market where tenants have more options and have smaller budgets. "For the rest of the year, we expect the leasing volume will fall further, as rents are likely to fall further," Dr Lee said. "The rental market will face further headwinds as firms restructure amid the uncertain climate."

On Wednesday, flash estimates from SRX Property showed a 0.4 per cent month-on-month slip in resale prices of non-landed private homes in July, while volumes were 10 per cent higher than a month ago. Last week, SRX Property said HDB resale prices rose 0.7 per cent while volumes were down 13.7 per cent in July.

Based on SRX's study of monthly averages for the past one year, about 82 per cent of monthly transactions are captured by the time the flash report for private non-landed resale prices is released; for HDB resale prices, some 99 per cent of transactions are captured by the time the flash report is published.

[richwang]

https://s3-ap-southeast-1.amazonaws...._July_2016.pdf

The original report (with charts).