The rental market for both private non-landed homes and HDB flats continued to soften, according to flash estimates from SRX Property.
It said on Wednesday that non-landed private residential properties saw rents drop 0.9 per cent in October compared to September.
For the HDB market, rents fell 0.5 per cent in October compared to the previous month. HDB 4-room, 5-room and executive flats posted declines in rents of 0.8 per cent, 0.2 per cent and 1.4 per cent respectively, while those of 3 room flats edged up 0.2 per cent
On the private rental market, non-landed units in all three sectors - prime central areas, city fringe and suburban areas - saw rents fall by 0.7 per cent, 1.1 per cent and 1.5 per cent respectively.
Rents of private non-landed homes have declined 5.1 per cent to date this year, with October marking the ninth consecutive monthly fall. Year-on-year, rents in October 2014 are down 5.3 per cent from October last year.
There were also fewer rental deals in October. An estimated 3,208 condos and apartments were leased out last month, a 1.3 per cent decline from the 3,250 units rented in September this year.
Year-on-year, rental volume in October 2014 is 11.8 per cent higher compared with 2,869 units rented in October last year.
ERA said the continued drop in rents was expected as landlords now face a tenants' market.
"Tenants have strong bargaining power as the current supply glut and declining expat demand are pushing down rents." "In 2014, some 18,000 non-landed units will be completed; with almost 60 per cent of the units in suburban areas. At the same time, the government's ongoing restructuring of the economy to be less reliant on foreign labour is also slowing the residential leasing demand."
"Going forward, the situation is likely to get worse, as there will be more than 20,000 non-landed units to be completed each year for 2015 & 2016."
The property agency said current vacancy is around 7 per cent and this may increase to 10 per cent or more in 2015 and 2016, putting more pressure on rents.
For the HDB market, SRX Property data showed rents last month were down 2.1 per cent from October 2013.
Rental volume was relatively flat with an estimated 1,559 HDB flats leased out in October, a 0.8 per cent increase compared to 1,546 units rented in September.
Year-on-year, rental volume last month was 2.0 per cent lower compared with 1,591 units rented in October 2013.
ERA said falling private property rents has affected the HDB rental market, particularly the demand and rents for larger flat types.
"The competition for tenants from suburban private property owners that are lowering their rents for family-sized units to $2,500 to $3,500 a month are drawing tenants away from the HDB rental market," said ERA, adding that it expects this trend to continue.
ERA said it expects demand to continue for smaller flats with rents below $2,500.
