Rents increased for condominiums and private apartments last month but slipped for HDB units, according to SRX Property flash estimates released yesterday.
Experts attributed the rise in private rents to an increased supply of condominiums suited to higher-income tenants.
Private residential rents rose 0.2 per cent month on month in July, less than June's revised 0.6 per cent increase. They were 18.9 per cent lower than their January 2013 peak. Year on year, however, rents slipped 2.7 per cent for private condominiums.
Scotia Real Estate Group chief investment officer Francis Tan said: "The market seems dynamic as more highly qualified foreigners with higher spending power entered the tenancy market."
Barring any major shocks to the economy, or a change in policy, the private rental market will continue to do well for the second half of the year, he said, as more corporate entities set up shop on the island and hire more qualified workers.
HDB rentals, on the other hand, slid 0.1 per cent from June and were down 4.2 per cent from July last year. They were 13.6 per cent down from their peak in August 2013.
Rents in mature estates decreased by 0.2 per cent, while those in non-mature estates rose 0.1 per cent, SRX Property data stated.
Stricter immigration policies in recent years have seen a dwindling number of low skilled workers, which may have had an impact on demand for HDB units, Mr Tan said.
An estimated 1,835 HDB flats were rented in July, a 6.7 per cent increase from the 1,720 units in June. Year on year, rental volume increased by 1.2 per cent. By comparison, 4,834 condo units were rented out in July, an 11.8 per cent jump over June's 4,322 units
Mr Wong Xian Yang, head of research and consultancy at Orangetee Research, said an abundance of private units were on offer as many projects reached completion last year.
The HDB rental market is feeling the pressure of "an economy that is doing well and the availability of more condos, as many tenants chose facilities offered by private apartments," he said.
Mr Wong expects the private rental market to stabilise by next year .