Condo and HDB rents continue to fall in September

Rentals and leasing volumes for both private condominiums and public housing flats kept sliding last month, reflecting concerns over the weaker economic outlook.

Private condominium rents fell 0.6 per cent in September from August, the third straight month of decline, according to data from SRX Property yesterday. Rents were down 4.6 per cent from September last year.

Rentals for HDB flats slipped 0.3 per cent month on month in September, after falling 0.8 per cent from July to August. SRX said HDB rents were 4.5 per cent down from a year earlier.

"The numbers are not surprising. It shows that the malaise that is affecting the economy seems quite broad-based, hitting the HDB segment too... I expect continued weakness in the leasing market," said Mr Alan Cheong, research head at Savills Singapore.

The decline in condo rents was led by the core central region, with rents dipping 1.8 per cent, followed by a 0.3 per cent drop in rents for suburban condos.

Rentals for homes on the city fringe held up, however, rising by 0.2 per cent last month.

"City fringe properties have a strong hold and see resilient interest at large from tenants... especially senior foreign professionals who like living in niche localities with affordable rentals," said R'ST Research director Ong Kah Seng.

Despite the weaker rents, the number of leases signed for private apartments fell 14.2 per cent to an estimated 3,716 last month, from 4,329 units in August.

However, this figure was 8.5 per cent higher than the 3,426 apartments rented in September 2015.

"We anticipate rents to stabilise in late 2017, with the number of completions slowing," said Dr Lee Nai Jia, head of South-east Asia research at property consultancy Edmund Tie & Co.

"We forecast rents to fall by another 5 per cent before it reaches its trough."

In the HDB segment, rental volume declined 11.3 per cent to an estimated 1,491 flats, from 1,680 in August. Year on year, HDB leasing volume fell by 14.4 per cent last month.

SRX said HDB rents weakened across the board with drops of 0.7 per cent for three-room flats, 0.1 per cent for four-room units, 0.4 per cent for five-roomers and 0.8 per cent for executive flats.

Mr Ong said: "There are increased suburban condominium completions since 2014 and more HDB flats are being put up for subletting, so this has exerted a downward rental pressure for HDB flats."

A version of this article appeared in the print edition of The Straits Times on October 13, 2016, with the headline 'Condo and HDB rents continue to fall in September'. Print Edition | Subscribe