Rents for non-landed private homes continued to weaken in July, dipping 0.3 per cent compared to May, according to flash estimates released by SRX Property on Friday (Aug 14).
Condominiums and apartments in all types of locations softened: by 0.4 per cent in the prime districts (Core Central Region), 0.2 per cent in the city fringes (Rest of Central Region) and 0.3 per cent in outlying districts (Outside Central Region).
July’s rents were down 5.7 per cent year-on-year, and down 12.5 per cent from its peak in January 2013, SRX Property said.
The fall in June’s rents were revised to 0.3 per cent (same as July’s flash estimate), up from the previous estimate of a 0.5 per cent drop.
An estimated 4,147 units were rented in July, a 7.3 per cent increase from 3,866 units rented in June. Year-on-year, rental volume last month was 18.2 per cent higher than 3,508 units rented in July 2014.
As a bumper 6,916 private non-landed residential units were completed from April to June, significant downward pressure was applied onto rentals as owners of these units vie for a limited pool of tenants.
Moving forward, rents are expected to continue their downward trend this year and next given that 2016 will see even higher numbers of non-landed private developments being completed, real estate agency ERA said.
ERA added: “We have seen increasingly more tenants opting for 12 months leases rather than 24 months, which was the norm. They have been doing so to capitalise on the decline in rents due to the looming supply as more and more new units are being completed.”
HDB RENTS & NO. OF LEASINGS SLIP IN JULY
HDB rents dipped 0.1 per cent in July compared to the previous month, SRX Property’s fash estimates showed.
HDB 3-, 4- and 5-room flats posted a 0.4 per cent, 0.1 per cent and 0.2 per cent decrease in rents respectively, while executive flats saw a 0.5 per cent increase in rents.
Year-on-year, rents in July were down 0.7 per cent from July 2014, and down 6.1 per cent compared with its peak in August 2013. There was no revision for rents change in June.
Rents in mature estates went up 0.2 per cent, while rents in non-mature estates went down 0.4 per cent in July.
There were 1,692 HDB flats rented in July, a 5.4 per cent drop from the 1,788 units let in June. Year-on-year, rental volume in July is almost flat compared to 1,698 units rented in July 2014.
ERA commented that due to the continued decrease in private home rentals, HDB owners have been forced to correspondingly lower theirs to remain competitive.
The agency said that “as long as the private residential sector is facing depressed rents, we expect rents in the HDB market to continue exhibiting the same trend.”