Rents for condominiums and private apartments continued to stabilise last month while the more volatile rents for HDB flats reversed direction and rose, with both markets enjoying a pick-up in activity, according to a report yesterday.
Flash estimates from real estate portal SRX Property show rents for non-landed private homes saw no month-on-month change last month after inching down 0.1 per cent in June.
Private rents have been holding steady over the past year with the month-on-month price change trending within a -1 per cent and +1 per cent range, flattening out to an even narrower -0.2 per cent and +0.1 per cent margin since March.
Year-on-year, rents last month were just 0.4 per cent lower than in July last year, though they are still 19.1 per cent off their peak in January 2013.
Meanwhile, rental volume rose 4.7 per cent month-on-month to 4,896 units in July, the fifth consecutive month it stayed above the 12-month average, despite the 2.4 per cent year-on-year dip.
Looking ahead, Ms Christine Sun, head of research & consultancy at OrangeTee & Tie, said Urban Redevelopment Authority (URA) data from 2012-2017 shows leasing demand typically peaking in the third quarter. But other factors in play could give rents a bigger-than-usual boost.
Some potential home buyers may turn to the leasing market with the cost of acquiring a new home now higher under the July 6 cooling measures, but "a rental squeeze" could also emerge soon with URA data showing a slowdown in new private home completions over the last two quarters, said Ms Sun.
"A massive reduction in private residential stock is also on the cards as more homes will be demolished to make way for newer developments after the recent spate of collective sales. New homes from these collective sales sites will enter the market only three to four years later," she noted.
In the HDB rental market, rates increased by 1 per cent last month after falling 0.7 per cent in June.
The smaller three-and four-room flats gained, with rent increases of 1.6 per cent and 1.5 per cent respectively, while rents for five-room and executive flats dipped by 0.3 per cent and 1 per cent respectively.
Year-on-year, HDB rents last month were down by 1.5 per cent from July last year, and 15 per cent off their high in August 2013.
Volume recovered in July with an 11.9 per cent month-on-month jump to 1,932 flats, after falling for three straight months. Year-on-year, leasings were up by 3 per cent.
Ms Sun said the HDB rental market may similarly benefit from displaced collective sale owners and potential private home buyers leasing flats while waiting for property prices to turn in their favour with the latest curbs.