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Rental transactions jump in March: SRX
THE number of rental transactions for condominiums, private apartments and Housing & Development Board (HDB) flats swelled by double digits in March, as rentals continued to decline.
Consultants believe this is likely due to rental renewals and tenants' property hopping in search of a better deal, rather than new demand generated. February was also a lull month with Chinese New Year festivities, hence the low base for comparison.
Eugene Lim, key executive officer at ERA Realty Network, said: "Also, with weaker economic conditions, expatriates might be sent to Singapore on a project basis, which results in shorter leases signed. Hence, although the rental volume indicates a more active leasing market, much of it is due to a reshuffling of tenants."
Rentals for private condominiums and apartments fell one per cent in March compared with February, according to estimates released by SRX Property on Wednesday. Rental volume rose 35.5 per cent, however. About 4,331 units were rented in March, compared with 3,197 units in February. The rental volume was also 9.3 per cent higher than the 3,961 units rented in March 2015.
By region, the city centre, city fringe and suburbs saw drops in rents of 0.8 per cent, 1.9 per cent and 0.4 per cent respectively.
Year on year, private rents last month were down by 5.3 per cent from March 2015. They were also down 15.9 per cent from their peak in January 2013.
Reasons for the rental price downtrend include increased private home completions, which intensify competition among landlords for tenants, as well as stricter foreign labour regulations.
RST Research director Ong Kah Seng said it is a tenants' market now: "Two-year leases have fallen out of favour since 2015; the current standard is a one-year lease. Foreign professionals who have uncertainty in their placements in Singapore, or may be activated to relocate anytime to help their headquarters make inroads in emerging Asian markets would also prefer shorter leases." He expects private residential rents to fall by about 5 per cent in 2016, level with the 5.5 per cent rental fall in 2015.
On the public housing front, HDB rents dipped 0.1 per cent in March, while HDB rental volume rose 44.3 per cent to about 2,214 flats, from 1,534 in February. Year on year, rental volume in March was also up 3 per cent.
Three-room, four-room and executive flats posted 0.8 per cent, one per cent and 0.1 per cent declines in rentals respectively. Rents of five-room flats bucked the trend by rising 1.5 per cent.
Year on year, rents in March 2016 were down 3.9 per cent from March 2015. They were also down 9.1 per cent compared to its peak in August 2013.
Mr Ong expects HDB rents to fall by up to 5 per cent in 2016, on a par with 2015's 4 per cent rental fall, as more flat owners move into completed condominiums and put their flats up for subletting.
Mr Lim expects there to be 22,000 to 24,000 HDB units leased in 2016, similar to those a year ago.