Rentals for condominiums and private apartments continued to stabilize in July while the more volatile rents for HDB flats reversed direction and rose, with both markets enjoying a pickup in activity, according to SRX yesterday.
Flash estimates from SRX real estate portal show rents for non-landed private homes saw no month-on-month change in July after inching down 0.1 per cent in June.
Private rents have been steady over the past year with the the month-on-month price change trending within a -1 per cent and +1 per cent range, flattening out to an even narrower -0.2 per cent and +0.1 per cent margin since March. Year-on-year, rents last month were just 0.4 per cent lower than in July 2017, though they are still 19.1 per cent off their peak in January 2013.
Rental volume rose 4.7 per cent month-on-month to 4,896 units in July, the fifth consecutive month it stayed above the 12-month average, despite the 2.4 per cent year-on-year dip.
Christine Sun, head of research & consultancy at OrangeTee & Tie, said Urban Redevelopment Authority data from 2012-2017 shows leasing demand typically peaking in the third quarter. But other factors in play could give rents a bigger than ususal boost.
Some potential home buyers may turn to the leasing market with the cost of acquiring a new home now higher under the July 6 cooling measures, but, additionally, “a rental squeeze” could emerge soon with URA data showing a slowdown in new private home completions over the last two quarters, said Ms Sun.
“A massive reduction in private residential stock is also on the cards as more homes will be demolished to make way for newer developments after the recent spate of collective sales. New homes from these collective sales sites will only enter the market three to four years later,” she noted.
For HDB rental market, rates increased by 1 per cent in July after falling 0.7 per cent in June. The smaller three-room and four-room flats gained, with rent increases of 1.6 per cent and 1.5 per cent respectively, while rents for five-room and executive flats dipped by 0.3 per cent and 1 per cent respectively.
Year-on-year, HDB rents last month were down by 1.5 per cent from July 2017, and 15 per cent off their high in August 2013.
Volume recovered in July with an 11.9 per cent month-on-month jump to 1,932 flats, after falling for three straight months. Year-on-year, leasings were up by 3 per cent.
Ms Sun said the HDB rental market may similarly benefit from displaced en bloc owners and potential private home buyers leasing flats while waiting for property prices to turn in their favour with the latest curbs.