SINGAPORE - It was a mixed picture for Singapore's rental housing market - while rents for HDB flats and private apartments saw their first monthly increase in four months in July, leasings fell as the Covid-19 pandemic continued to impact travel and jobs.
The SRX data showed HDB rents rose 1.4 per cent in July from the previous month, a bigger rate of increase than the small 0.4 per cent rise for private condominiums and apartments,
One possible reason for the "healthy" increase in HDB rents is demand from Malaysian workers or their employers to rent HDB flats here given the Covid-19 border restrictions, said ERA Realty's head of research and consultancy Nicholas Mak.
The recent announcement of the Periodic Commuting Arrangement would allow some of these workers to go to Malaysia to see their families. However, as they would have to stay in Singapore for at least 90 days before returning for home leave, these workers would still require accommodation in Singapore, said Mr Mak.
The overall edging up of rents for both private and HDB homes last month could also be due to some landlords raising asking rents after observing a sudden surge in demand during the circuit breaker period, said Christine Sun, head of research and consultancy at OrangeTee & Tie.
She also observed that more expats could be opting for cheaper private housing options given current job and pay uncertainties. This "shift in demand" may be why rents rose for private units in the suburbs (outside central region) and city-fringes (rest of central region). Conversely, rents for more luxurious homes in the prime districts (core central region) dipped for the fifth straight month.
"We may expect more tenants to continue to opt for cheaper housing options as some may be facing pay cuts or given smaller housing packages in the current macroeconomic uncertainties," said Ms Sun.
Year-on-year, overall rents for private apartments in July are down 0.9 per cent from from July 2019, and are 17.5 per cent off their peak in January 2013. For HDB flats, rents are down by 0.5 per cent from a year ago and 14.9 per cent lower than their peak in August 2013.
Rental volume, meanwhile, shrank for both the private and HDB markets last month.
July leasings for private condominiums and apartments fell 7.2 per cent month-on-month to 3,880 units. This is 32.3 per cent lower than a year ago and 22.8 per cent less than the five-year average volume for the month of July.
The volume for HDB flats in July tumbled 19.1 per cent from June to 1,435 flats. This is 31.6 per cent lower than a year ago and 25.7 per cent below the five-year average volume for the month.
The weakness in the employment market which led to job losses among some expatriates resulted in the contraction in leasing demand, said Mr Mak. This is illustrated by the sharp 30-plus per cent year-on-year decline in leasing volume in both the private and public housing market in July.
Ms Sun said fewer expats are also coming to Singapore in recent months as border restrictions and stay-home notices for inbound travellers are still imposed.
Rising unemployment, especially in the tourism, hospitality, aviation and services sectors, may also now be affecting the rental demand for both HDB and private units, she added.
Looking ahead for the private rental housing market, leasing demand and, consequently rents, may remain under pressure.
Rental demand for more affordable HDB flats, especially those located near industrial estates, is expected to remain healthy, said Mr Mak.