The rental market ran hot and cold last month with HDB flats and private apartments recording their first monthly increases after four months of decline, but leasings fell as the pandemic continued to impact travel and jobs.
HDB rents rose 1.4 per cent last month from June, a bigger rate of increase than the 0.4 per cent rise for private condominiums and apartments, SRX data showed yesterday.
One possible reason for the robust lift in HDB rents was demand from Malaysian workers or their employers to lease flats given the Covid-19 border restrictions, said ERA Realty research and consultancy head Nicholas Mak.
A recent easing of these rules will allow some of these workers to go to Malaysia to see their families, but as they would have to stay in Singapore for at least 90 days before returning for home leave, they would still require accommodation in Singapore, said Mr Mak.
The overall rise 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 Ms Christine Sun, head of research and consultancy at OrangeTee & Tie.
She also noted that more expatriates could be opting for cheaper private housing given job and pay uncertainties. This "shift in demand" may have sent rents up for private units in the suburbs and city fringes, while rents for more luxurious homes in prime districts 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.
Overall rents for private apartments were down 0.9 per cent from July last year and 17.5 per cent off their peak in January 2013. Rents for HDB flats dipped 0.5 per cent from a year earlier and were 14.9 per cent lower than their peak in August 2013.
Rental volumes, meanwhile, shrank for both private and HDB flats last month.
July leasings for private condominiums and apartments fell 7.2 per cent from June to 3,880 units.
This was 32.3 per cent lower than a year earlier and 22.8 per cent under the five-year average volume for July.
Volumes for HDB flats last month tumbled 19.1 per cent from June to 1,435 units - 31.6 per cent lower than a year earlier and 25.7 per cent below the five-year average volume for the month.
Job losses among some expatriates resulted in the contraction in leasing demand, said Mr Mak. This was illustrated by the sharp 30 per cent or so year-on-year decline in leasing volume in both the private and public housing markets last month.
Ms Sun said fewer expatriates have been coming to Singapore in recent months, given border restrictions and stay-home notices for inbound travellers.
Rising unemployment, especially in the tourism, hospitality, aviation and service sectors, may also be affecting demand for HDB and private rental units, she added.
Rental demand for more affordable HDB flats, especially those near industrial estates, is expected to remain healthy, said Mr Mak.