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Condo rents flat in April; HDB rents dip

Tenants in no hurry to accede to high rents asked for by landlords, says analyst
Thursday, May 14, 2015 - 05:50
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Private residential rents remained flat in April compared to March, while HDB rents slipped 0.7 per cent, data from SRX Property shows.

Singapore

PRIVATE residential rents remained flat in April compared to March, while HDB rents slipped 0.7 per cent, data from SRX Property shows.

Transaction-wise, private rental volumes fell 11.9 per cent from March and public rental volumes, 13.2 per cent.

These numbers had climbed in March, when leasing interest underwent a short recovery on the back of pent-up demand during the festive period the month before, consultants say.

R'ST Research director Ong Kah Seng said: "The flattish overall April rentals show that tenants are still quite tight with their rental budget. The flat rents in April indicate that tenants are finding rents have better matched their affordability, but feel they can be lower still.

"Most tenants understand there are substantial new private residential completions from 2014, so there's no hurry for them to accede to high rents asked for by landlords."

Divided into regions, condominiums and apartments in the prime city area had a 0.7 per cent increase in rents; rents in the city fringe fell 0.1 per cent, and those in the suburbs, by 0.7 per cent, but Mr Ong dismissed these changes as a "random occurrence".

Going by a year-on-year comparison, rents in April were down 6 per cent; they were also 11.2 per cent down from their peak in January 2013.

A total of 3,621 condo and apartment units were rented in April, 11.9 per cent lower than the 4,111 units rented in March. Year on year, rental volume in April was 11.2 per cent higher than the 3,257 units rented in April 2014.

 On the public housing front, four-room, five-room and executive flats posted a 0.9 per cent, 1.3 per cent and 0.4 per cent decrease in rents respectively.

Among three-room flats, there was a slight 0.4 per cent increase in rents.

Rents remained unchanged in mature estates, but fell 1.5 per cent in non-mature estates in April.

 Year on year, overall rents in April fell 3 per cent. They are also 6.2 per cent off their peak in August 2013.

HDB rental volume fell 13.2 per cent to about 1,705 HDB flats rented in April, compared to 1,964 units rented in March.

Year on year, rental volume in April was 0.9 per cent lower, compared to 1,721 units rented in April 2014.

Mr Ong expects condo rents to fall by up to 7 per cent through this year. "The stalemate between tenants' offer rents and landlords' asking rents will continue so long as the substantial new-completions situation persists," he said.

"Also, tenants will continue to pride practicality and costs over paying premiums for additional frills, since most properties completed in the past decade are already of very good quality.

"Older apartments have larger unit sizes and rooms, and lower per-square-foot per-month rents, notwithstanding outmoded property designs."