Changing nature of tenancies?

The rental market softened last month after a brief spurt in March when new leases signed for Housing Board flats and private apartments jumped by double digits in percentage terms from February.

This slowdown was well within expectations, given that the inflow of foreign professionals tends to be higher at the start of the year, especially just after Chinese New Year, experts noted. Executive condo owners may sublet their unit after fulfilling the MOP.  Upcoming executive condo include Treasure Crest and Northwave EC while existing ones include The Terrace EC, Brownstone EC, The Visionaire EC, Parc Life EC , Waterwoods EC, Signature at Yishun, Skypark Residences, Wandervale EC, The Vales EC, The Criterion EC, Bellewaters EC, Bellewoods EC.

Still, year on year, rental volume was higher for both segments – reflecting the changing nature of tenancies, where leases are as short as six months.

In terms of rental amounts, private apartment rents were unchanged last month after falling 1.4 per cent in March, while HDB rents fell 0.6 per cent after falling 0.4 per cent in March, according to flash estimates from SRX Property yesterday.

Both have been on a slide, owing to the rising number of home completions combined with little new demand from expatriates.

The flatness in private apartment rents last month was likely a compensation for the sharp decline in March, said Mr Alan Cheong, Savills Singapore research head. “The rental market has not been accelerating in its decline, but is falling in a ‘sawtooth’ pattern. This suggests the market is still rational, rather than going into a freefall where one would see constant or accelerating declines,” said Mr Cheong.

Rents in the core central region (CCR) were unchanged from March, rents in the rest of the central region (RCR) rose 0.1 per cent and rents in the outside central region (OCR) or suburbs fell 0.1 per cent. Year on year, rents are 5.4 per cent lower overall. CCR rents are down 1.9 per cent; RCR rents are off 8.2 per cent and OCR rents are 6.8 per cent lower.

HDB rents are falling as tenants have many choices, with increased private condominium completions since 2014 and more HDB flats up for sublet as their owners upgrade, said Mr Ong Kah Seng, R’ST Research director.

HDB rents fell 0.3 per cent in the mature estates and were down by 0.9 per cent in the non-mature estates in April. Year on year, rents in mature estates were 3.9 per cent lower and those in non-mature estates 4.8 per cent lower.

Rising home completions boosted volumes, with more people moving to newer properties when their tenancies expire – some even ending their leases earlier, said Mr Lim Yong Hock, PropNex Realty key executive officer.

The number of private apartments rented out last month fell 10.3 per cent month on month to 3,953 but that was 10.5 per cent higher than a year back.

HDB rental volume fell 2.2 per cent from March to 2,048 but was 5.8 per cent higher year on year.

“Rents are getting very competitive. Any owners who try to keep to their previously transacted rents can be prepared to have difficulties renting out,” Mr Lim added.

waterwoods ec executive condo site photo 1