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Rents on private condos, HDB flats still under pressure: consultants
RENTS for private non-landed residential units increased in January, reversing from the past 11 consecutive months of decline, but rents for public housing flats continued to slide, according to estimates by the Singapore Real Estate Exchange (SRX).
Consultants noted, however, that the January rise in the private homes rental market is no more than a blip due to monthly fluctuations, with no signs that rents are on a rebound.
The SRX rental index that tracks non-landed private residential units here posted a 0.2 per cent increase in January from a month ago. SRX said the rise in overall rents for private condominiums and apartments were driven mainly by the Rest of Central Region (RCR) that saw rents increase by 1.9 per cent.
Rents in the Outside Central Region (OCR) inched up 0.2 per cent while rents in the Core Central Region (CCR) decreased by 0.8 per cent.
"The basic market fundamentals have not changed in the last year nor would it change in 2015," said SLP International executive director Nicholas Mak, who is projecting a 4-7 per cent fall in rents for the full year.
"There will be a growing number of private and HDB units or rooms offered for lease in 2015 as more housing units are completed and more HDB flats meet the five-year minimum occupation period (MOP) rule," he noted.
With the government unlikely to raise the intake of foreigners and expatriates this year, residential leasing demand will remain muted since the increase in the expatriates population will not keep pace with the supply of housing units for lease, Mr Mak said.
An estimated 3,417 private condos were rented in January, representing a 13 per cent rise from 3,025 units rented in December and marking a 16.1 per cent year-on-year increase from the 2,944 units rented in January 2014.
While leasing activity is holding up as existing tenants relocate to better options, overall private non-landed residential rents are likely to fall 6-8 per cent for the whole year, said ERA Realty key executive officer Eugene Lim.
Under the current property tax regime, landlords are no longer allowed to apply for vacancy refund on their property tax should they fail to rent out their units. "As interest rates are also on the rise, there is a sense of urgency for landlords to quickly secure their tenants to negate holding costs," he said.
In the public housing market, rents for HDB flats continued to slide a further 0.5 per cent in January compared to December 2014, SRX rental index for HDB flats show. Four-room, five-room and executive flats posted declines of 1.3 per cent, 0.3 per cent and 1.6 per cent, respectively. Three-room HDB flats saw a 0.3 per cent pick-up in rents over the month.
Compared to a year ago, HDB flat rents were down 1.6 per cent in January. Rents of mature estates marked a bigger drop of 1.9 per cent, compared to non-mature estates where rents fell 1.4 per cent year on year.
SRX said that HDB rents of non-mature estates in December have dropped 6.9 per cent from its peak in October 2012, while rents of mature estates in December have dropped 4.4 per cent from its peak in February 2013.
But rental volumes of HDB flats rose 4.4 per cent month on month to an estimated 1,651 HDB flats in January - almost flat compared to a year ago. Mr Lim of ERA said that he expects overall HDB rents to slip 5-6 per cent for the whole year, as the decline in private residential rents is "keeping a lid on further price increase for HDB flat rents".
"Those with more than S$2,500 budget are likely to go for private non-landed units instead of HDB flats," he pointed out.
- Singapore Real Estate Exchange
- private non-landed residential units
- HDB flats
- Housing and Development Board