September private apartment rents dip 0.3%

Private apartment rents fell again last month, while Housing Board flats held their own, according to data out yesterday.

And rents for both property types are expected to weaken still as more condos, especially those in the suburbs, are completed.

"HDB flat rents (will) continually dip this year... as more flat owners move into completed suburban condominiums and put the HDB flat up for sub-letting," said Mr Ong Kah Seng, R'ST Research director.

Private apartment rents fell 0.3 per cent last month from August, according to flash estimates from SRX Property. This followed a 0.4 per cent decline in August, similar to earlier flash estimates.

The decline was led by suburban rents, which fell 1.3 per cent. Those in the core central region were up 1.0 per cent while city fringe rents dipped 0.6 per cent.

Rents have fallen about 5.6 per cent from a year earlier. Core central region rents were down about 3.0 per cent in September compared with the same month last year but rents slipped 4.3 per cent in the city fringe and 8 per cent in the suburbs.

"Suburban rents have dropped the most as there is a lot of supply... When the market sees rents trending down, people will try to move as near as they can to the city centre. The thinking is, 'can I go for a better deal?' " said Mr Eugene Lim, ERA Realty key executive officer.

There were 3,758 private units leased last month, up 17.7 per cent from a year earlier.

"Tenants are taking advantage of lower rents by signing shorter leases and moving around... Tenants now prefer 12-month leases instead of 24 months," said Mr Lim.

Many landlords are open to negotiation as well, he noted.

So a rental budget of $4,000, for example, could get one a two-bedder or even a three-bedroom unit at older developments in the central core region when one would have needed up to $5,000 before.

Given record private home completions ahead, private rents could decline 4 to 5 per cent for the whole of this year, Mr Lim said.

While HDB rents were flat last month, they fell 0.7 per cent in August compared with July. This was revised from an earlier estimated 0.6 per cent fall. They are down 3.2 per cent from September last year.

With more suburban condo completions, the leasing market should see more four- and five-room HDB flats on offer, said R'ST Research's Mr Ong.

"Five-room-flat rents decreased 0.5 per cent last month, suggesting softened leasing conditions for such flats due to more owners moving into (their) completed condos and renting out the flat."

Rents for three-room HDB flats fell 0.1 per cent, while four-room flat rents rose 1.1 per cent and executive flat rents fell 2.8 per cent.

Rennie Whang

A version of this article appeared in the print edition of The Straits Times on October 15, 2015, with the headline 'September private apartment rents dip 0.3%'. Print Edition | Subscribe