Private condo rentals fall to 2-year low: SRX

Rents for non-landed private housing in Singapore continued to slide last month to their lowest level in two years, and landlords may find it increasingly difficult to secure tenants, with more supply entering the market in the coming months, analysts said.

Rents for condominiums fell 1.3 per cent last month, the fifth straight monthly decline, to their lowest level since December 2011, a preliminary report by the Singapore Real Estate Exchange (SRX) showed yesterday. Rents have fallen 5.5 per cent from the January peak, the data showed.

Meanwhile, the private resale housing market remained quiet, with prices dipping another 0.2 per cent from the previous month, while the transaction volume was flat at 377 deals, the SRX report showed.

The sales volume for the whole of last year was 6,550 deals, 46.7 per cent lower than in 2012, as property curbs continued to bite.

Analysts attribute the softening in rents to the increase in the number of completed private homes as well as tighter restrictions on foreign employment, with expatriates accounting for a large portion of the demand.

“It continues to be a tenant’s market (owing) to the new supply of completed buildings and the cut in foreign manpower employment. Older apartments and condominiums will experience the impact more as they will find it hard to compete against newer developments,” said Mr Eugene Lim, Key Executive Officer of real estate agency ERA.

The SRX report showed that the number of leases last month fell to an estimated 2,188, down from 2,274 in November.

Still, for the whole of last year, 31,788 rental deals were estimated to have been transacted, higher than the 30,593 in the previous year.

A total of 19,302 new completed private homes are expected to hit the market this year, and another 19,727 and 26,355 units are expected in the next two years, respectively, according to data from the Urban Redevelopment Authority.

Analysts said these would add further pressure to rents.

“We notice that fewer people are coming in on expatriate terms. Most of them are now on local packages, so the rent-paying capability is correspondingly lower,” said Savills Head of Research and Consultancy Alan Cheong.

Mr Lim said the private housing market would stay subdued as the Government is expected to keep in place its cooling measures until it is satisfied that the market has stabilised.

“Overall, we can expect private property prices to further moderate by 6 to 10 per cent in 2014,” he said.

Source : Today – 14 Jan 2014

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