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SINGAPORE – Rents for the Housing Board’s private flats and apartments were flat in August, but the lease was another huge success, with rental volumes falling to lower levels than during the switch period, according to flash data. from SRX Property on Wednesday (September 9).
August leases for private condos and apartments fell 20.4 percent month-over-month to 2,716 units. This is 47 percent lower than a year ago and 42 percent less than the five-year average volume for the month of August.
HDB apartment rental volume in August also decreased, by 16.7 percent from July to 1,025 apartments. This is 46.2 percent lower than a year ago and 44.1 percent below the five-year average volume for that month.
The sharp drop in rental volumes, which was also observed in July, could indicate the beginning of a “domino effect” for the rental market, which has been hampered by an economic slowdown and rising unemployment among foreigners in Singapore, said Christine Sun, head of research and consulting at OrangeTee & Tie.
Noting employment support schemes aimed at helping companies retain their Singaporean workers, Ms Sun added that it is “inevitable” that the reduction in foreign employment will have an adverse impact on the rental market on a temporary basis.
ERA Realty’s head of research and consulting, Nicholas Mak, agreed, saying that the decline in demand in both HDB and the private real estate market may be due to weakness in the overall job market, which has seen losses of employment for some expats.
This broader decline has not been offset by increased demand for HDB apartment rentals by Malaysian workers seeking affordable accommodation close to their workplaces following the implementation of the Malaysia-Singapore border restrictions due to Covid- 19.
Flash data from SRX also showed that private apartment rentals were unchanged in August from the previous month, while HDB rentals saw a small increase of 0.3 percent in the same period.
Year-over-year, total private apartment rentals in August were down 1 percent from the previous year and 17.3 percent below their peak in January 2013.
For HDB flats, rents fell 0.1 percent from August last year and were 14.6 percent lower than their peak in August 2013.
Although the SRX rental index was stable for the private residential market in August, Ms. Sun noted that rents have been falling for six consecutive months for luxury homes in major districts or the central central region. Rents have also fallen slightly in outlying areas or outside the central region.
“Trends may indicate that more expatriates are moving from prime locations to suburban areas or marginal areas of the city, where housing tends to be more affordable in light of the current economic slowdown,” he said.
Rental vacancies may increase in the coming months, possibly putting some downward pressure on rents at certain locations, he said.
As for HDB rents, Mak said, the 0.3% monthly increase comes as a significant number of relatively new HDB apartments completed the five-year minimum occupancy period this year and could become available for lease.
These newer apartments would generate higher rents compared to the older apartments in the vicinity.
As more new apartments enter the rental market, they could support or even increase HDB’s overall rental rate, he added.
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