The housing rental market in Singapore is likely to see a temporary slowdown in activity due to the coronavirus outbreak as data released on Wednesday showed rents for both non-landed private homes and HDB flats rose in January while the number of leasings fell.
Rents of private apartments and condominiums climbed 0.9 per cent month on month, after dipping 0.5 per cent in December, according to real estate portal SRX Property’s flash data.
Year on year, private home rents rose 2.9 per cent from January 2019, but are still down 15.6 per cent from their peak in January 2013.
The stronger rental prices came on the back of fewer private homes being completed last year and some older developments being demolished to make way for new homes after en bloc sales.
Leasing volume for private non-landed homes shrank for a sixth consecutive month, dipping by 4.9 per cent month on month to 3,892 units.
The lower rental volume could be attributed to the rising rental prices and the Chinese New Year period when the number of viewings typically fall as both landlords and tenants are on holiday, said Christine Sun, head of research and consultancy at OrangeTee & Tie. The peak rental season usually occurs around the second and third quarters of the year.
Although leasing volume was lower, SRX’s rental index increased, mainly because the decrease in supply was greater than the decline in demand, said ERA Realty’s head of research and consultancy Nicholas Mak.
Year on year, rental volumes for condos are down 22.5 per cent and are also 7.5 per cent lower than the five-year average volume for the month of January.
Ms Sun expects a slowdown in the rental market as the outbreak of the virus, officially named Covid-19, hits sectors such as tourism, hospitality and MICE (meetings, incentives, conferences and exhibitions).
“This may have some impact on hiring, which may affect the leasing market temporarily,” she said. “However, we may expect leasing demand to rebound when the situation stabilises or improves. Singapore had emerged strongly after the last Sars epidemic and proven to be resilient amid crises. The lion city will remain attractive as one of the top investment destinations in the long term.”
Over in the public housing market, HDB rents rose 0.8 per cent last month from December. Year on year, they increased by 2 per cent, but were still down 13.5 per cent from their peak in August 2013.
Rental volumes dipped 5.1 per cent month on month, with 1,653 HDB flats taken up in January, versus 1,741 units in December. But year on year, volume dropped by 22.5 per cent from a year ago, and was also a substantial 14.4 per cent lower than the five-year average for the month of January.