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RENTALS of non-landed private homes as well as Housing & Development Board flats continued to decline last year, based on the December 2015 flash estimates from SRX Property.
However, the volume of rental contracts in both markets rose in December on a year-on-year basis.
SRX Property's overall rental index for non-landed private homes eased 5.4 per cent in 2015, comparable to the 5.2 per cent fall in 2014. In 2013, the index declined 2.5 per cent.
The rental index value for December 2015 reflects a 15 per cent slide from the peak in January 2013.
The December flash estimate represents a marginal 0.1 per cent month-on-month increase following a 1.3 per cent m-o-m fall in November 2015.
For the whole of this year, ERA Realty Network's key executive officer Eugene Lim is forecasting a 5 to 8 per cent rental drop for non-landed private homes.
"In 2016, rents are expected to continue being under pressure from tight immigration policies and high supply," he added. "This will be most keenly felt in the OCR (Outside Central Region), where the bulk of the completions are located."
The SRX data showed that rents in OCR fell 6.4 per cent last year. In the city-fringe or Rest of Central Region, the drop was higher, at 7.6 per cent, while the Core Central Region posted the smallest decline of 0.9 per cent.
SRX Property's rental index for HDB flats too retreated 4 per cent in 2015, a quicker pace of decline compared with the drops of 2.5 per cent in 2014 and 2 per cent in 2013. Rents in December 2015 were down 8.6 per cent from the peak in August 2013. On an m-o-m basis, the index dipped 0.6 per cent in December 2015, similar to the 0.5 per cent drop in November.
Going by SRX's estimates, the volume of leasing deals for HDB flats rose 8 per cent year-on-year to 1,817 in December 2015. Mr Lim said the firm demand in the HDB leasing market is being supported by some expats who are facing crimped relocation packages, turning to renting a HDB flat instead of a private apartment.
In the private segment, too, the estimated 3,093 leasing transactions for condos and apartments in December marked a 6.4 per cent increase from December 2014.
"This is likely to be due to more lease renewals rather than new demand - as more tenants commit to shorter leases to capitalise on the falling rentals environment," said Mr Lim.
Furthermore, tenants' preference these days for shorter leases of a year, rather than two years, is increasing the frequency of leasing deals, boosting the total volume of rental transactions. Mr Lim expects the number of rental transactions to hold this year.