Condo rents slip in October as demand shrinks; HDB rents inch up: SRX

Rents for non-landed private homes slipped in October from the previous month, while those for HDB flats edged up, although they were both higher than a year ago.

Overall condo rents declined 0.2 per cent from September, but rose 4.2 per cent year on year. However, they are still 16.9 per cent below their peak in January 2013.

The core central region (CCR) was the hardest hit, with a 0.6 per cent fall from September to October, while rents in the suburbs, or outside central region (OCR) slipped 0.2 per cent. Rents in the rest of the central region (RCR), however, inched up 0.1 per cent.

Year on year, condo rents were up in all regions last October: CCR by 6.3 per cent, RCR by 4 per cent, and in the OCR by 2.8 per cent.

The SRX flash data released on Wednesday also showed that some 4,341 condo units were leased in October, down 0.8 per cent from 4,378 units in September, and 4 per cent lower from a year ago.

Noting that condo rental volume shrank for a third consecutive month, Christine Sun, head of research and consultancy at OrangeTee & Tie, said that the decline in rental volume may be seasonal, as leasing demand usually falls during the last quarter, when most expatriates would have already renewed or signed new leasing contracts.

“Leasing demand may have also dipped on the back of the weakening employment outlook for Q4, as many firms have indicated that they will be cutting back on hiring, amid the current trade conflicts and global economic uncertainty.

“However, there could be a silver lining on the horizon, as some MNCs (multinational corporations) may redeploy their employees to work in Singapore, or consider shifting their headquarters here amid the growing unrest in Hong Kong. This may lend some support to the private rental market in the coming months,” added Ms Sun.

Over in the public housing market, HDB rents rose 0.3 per cent last month from September, though they are still down 14.4 per cent from their peak in August 2013.

For the month of October, rents for three-room and four-room flats climbed 0.4 per cent each, and rents for five-room flats edged up 0.3 per cent. But rents for executive rents fell 1.5 per cent. In non-mature estates, rents rose by 0.6 per cent, while rents in mature estates remained the same.

Year on year, HDB rents were up 1.4 per cent, with all room types posting increases, except for executive rents, which fell 0.6 per cent.

There were 1,830 HDB flats rented in October, a 4.3 per cent decrease from 1,913 units in September.

Four-room flats were the most popular last month, making up 34.1 per cent of total rental volume, followed by three-room flats with 32.4 per cent. Five-room flats accounted for 26.8 per cent of volume, and executive flats 6.7 per cent.

HDB rental volumes decreased 9.6 per cent from October 2018, and are also 1.4 per cent lower than the five-year average volume for the month of October.

According to Ms Sun, the weakened demand for HDB flats comes as rents are rising.

That said, she expects that the continual tussle for tenants amid the rising supply of HDB flats may exert some downward pressure on rents next year.

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