Latest data showed that the leasing market remained anaemic in both the private non-landed and public housing markets.
Rents for private condominiums and apartments edged down 0.5 per cent last month compared with May, according to flash estimates released yesterday by SRX Property.
Year on year, rents last month were down 6.5 per cent from June last year, and are 12.4 per cent lower since their peak in January 2013. They have, in fact, been falling every month since then, with one exception in January this year.
Rents in May have been revised from a 0.6 per cent decrease to a 0.8 per cent drop. Rents in the city and suburban areas declined by 0.8 per cent and 0.7 per cent, respectively, while those in the city fringe areas saw no change.
Property agency ERA blamed the falling rents on “stiff competition for a limited pool of tenants as more private residential units are completed”. Meanwhile, rents at Housing Board flats last month inched up by 0.1 per cent from May. However, they were down 1.8 per cent compared with the same month last year.
Executive director of property consultant SLP International Nicholas Mak said that the supply of both private and public housing units for lease has been outpacing demand this year.
He pointed out that about 21,800 new private homes will be completed this year, 84 per cent higher than the annual average supply of 11,865 units in the past five years from 2010.
“As a result of this mismatch in supply and demand, the vacancy rate is expected to rise from 7.8 per cent at the end of last year to 9.6 per cent at the end of this year.
“In addition, further downward pressure on rental rates for private housing is expected for 2015 and 2016.” said Mr Mak.
SRX Property’s data showed that rental volume of non-landed private homes rose slightly last month, with 3,777 units rented out, 1 per cent up from the 3,739 units in May.
On a year-on-year basis, rental volume last month was 15.4 per cent higher than the 3,273 units for June last year.
ERA credited the rise in rental volume not to new demand but, rather, to existing tenants moving to get better quality units or cheaper rents.
It said: “Over the last two years, we have seen increasingly more tenants signing 12-month leases rather than the traditional 24 months. They have been doing so because rents are on the decline due to the supply glut as more and more new units are being completed.
“Moving forward, we are likely to see rental volumes remaining robust for the rest of the year as tenants continue to play the ‘musical chairs’ game.”