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SINGAPORE – Rents for both Housing Board apartments and condominium units continued to rise in October, while rental volume grew for the second month in a row, according to flash data from real estate portal SRX Property published on Wednesday (May 11). November).
HDB rental volumes increased 13.9 percent per month to an estimated 1,734 units in October, from 1,523 units the previous month.
Condo rental volumes also increased, 6.3 percent month-on-month. An estimated 4,409 units were rented in October, compared to 4,148 units in September.
Christine Sun, head of research and consulting at OrangeTee & Tie, said the increase in rental volume could be attributed in part to new restrictions on developers reissuing purchase options (OTPs) announced on September 28.
Under the terms of a standard OTP, new private home buyers have three weeks to reserve their right to purchase a property from a developer in exchange for a down payment in cash, which is up to 5 percent of the unit price. . If the buyer does not exercise the right to purchase, he may lose 25 percent of the reservation fee.
But some developers had been reissuing OTPs to buyers, giving them more time to align the funds needed to make the purchase and avoid paying additional buyer stamp duty (ABSD).
“Since most buyers have not been granted an extension of their OTP, some have sold their houses to avoid paying ABSD when they bought a new condo. They have subsequently rented a unit while awaiting the completion of their new house.” Said Ms. Sun said.
Meanwhile, HDB’s rents were up 0.7 percent from September, increasing for the fourth consecutive month. They are up 0.8 percent year-on-year, but are still down 13.7 percent from their peak in August 2013.
Condo rents are up 0.3 percent from September, also rising for the fourth month in a row. They are rising at the same rate year over year, but they are still 16.8% lower than the January 2013 peak.
Year-over-year, HDB apartment rental volumes continue to decline 12.1% and 8.9% less than the five-year average volume for the month.
As for condos, the total number of leases is 4.1 percent lower than in October 2019, but 5.8 percent higher than the five-year average volume for the month.
Ms Sun noted that there is still considerable uncertainty in the economy and that employment prospects remain weak for many sectors.
“The global economic weakness may require more job cuts in the coming months. A further reduction in foreign employment will continue to negatively affect the rental market,” he said.
“Therefore, the rental volume may be slightly lower in 2021, dropping about 5 percent year-on-year. Rents may fall about 2 to 4 percent next year.”
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