Sept condo, HDB rents down from Aug

Property watchers cite year-end effect and pullback in hiring amid slowing economy

Thu, Oct 10, 2019


RENTAL prices in Singapore fell in September from August for both non-landed private homes and HDB flats, though the rents rose on a year-on-year basis.

SRX flash data released on Wednesday also indicated that rental volumes fell for private condominiums, but rose for HDB flats on a month-on-month basis.

Overall rents for condos declined 0.4 per cent from August, but grew by 3.2 per cent year on year.

Condo rents in September were down 16.9 per cent from the peak in January 2013, with all regions experiencing rental price declines from last month.

The core central region (CCR) was the hardest hit, with a 1.1 per cent fall in September; rents in the city fringes or rest of central region (RCR) slipped 0.2 per cent, while rents in the suburbs or outside central region (OCR) dipped 0.1 per cent.

Conversely, year on year, condo rents in all regions increased: CCR by 4 per cent, RCR by 2.8 per cent, and OCR by 2.9 per cent.

A total of 4,193 condo units were leased in September, down 11.9 per cent from the 4,759 units in August.

However, volumes were 9.5 per cent higher than the five-year average volume for the month of September. Year on year, condo rental volumes shrank 7.3 per cent from September 2018.

Noting that rental volume for private condos shrank for a second consecutive month, Christine Sun, head of research and consultancy at OrangeTee & Tie, said: "While leasing demand typically slows down towards the end of the year, the lower leasing volume and rental prices could also be attributed to a possible pullback in hiring and the slower economic growth.

"Many firms have taken a more cautious approach in their hiring and expansion plans in light of the slowing economy.

"Some companies have also taken to raising their existing employees' skills level instead of hiring new employees. As hiring expectations for the last quarter of this year have dimmed amid the current global economic headwinds, leasing momentum may slow further in the coming months."

Nicholas Mak, head of research and consultancy at ERA Realty, said: "Due to the softer employment market, which would lead to fewer foreigners being employed, the number of private residential properties leased fell in September, as foreigners usually make up the majority of the residential tenants."

In the public housing market, HDB rental prices fell 0.3 per cent from August, and were down 14.8 per cent from its peak in August 2013.

Five-room and executive rents rose by 0.1 per cent and 0.2 per cent respectively last month; three-room and four-room rents fell respectively by 1.1 per cent and 0.3 per cent.

Year on year, HDB rents climbed 1.1 per cent in September. All room types except executive flats experienced rental increases. In mature estates, rentals rose by 1.3 per cent, while those in non-mature estates were up by 0.8 per cent from a year ago.

But HDB rents have continued to fall for a second consecutive month, and Ms Sun expects them to flatline or face some downward pressure, with the increasing supply of flats, and a possible hiring contraction in the coming months.

For the month of September, 1,802 HDB flats were rented, representing a 2.6 per cent increase from the 1,756 units in August. This was 4.8 per cent higher than the five-year average volume for the month.

By room types, three-room flats were the most popular last month, making up 34.9 per cent of the total rental volume. This was followed by four-room flats, which accounted for 33.9 per cent. Five-room flats made up 24.8 per cent of the volume, and executive flats, 6.3 per cent.

However, year on year, HDB rental volumes fell by 2.6 per cent from September 2018.

Mr Mak noted that, just as condo rental volume has fallen as the market approaches the traditionally-slower fourth quarter, a similar seasonal pattern is being seen in HDB rental volume.

"During the last 12 months, the HDB rental volume peaked in March 2019, and gradually declined...

"The HDB and private residential leasing market is likely to remain fairly stable with little upward pressure," he said.