SINGAPORE - Rents for non-landed private homes rose last month at their strongest pace since January, despite four straight months of lower leasings, while HDB rents inched down, according to flash data from real estate portal SRX Property on Wednesday (Dec 11).
Overall condo rents rose 1.2 per cent in November from the previous month, and are up 4.6 per cent year on year. However, they are still 16 per cent below their peak in January 2013.
Year on year, condo rents were up in all areas last month: the prime or core central region by 5.8 per cent, city fringe of rest of central region by 3.7 per cent, and in the suburbs or outside central region by 4.4 per cent.
The SRX flash data also showed that 3,980 private non-landed units were leased in November, down 7.6 per cent from October, and 3.1 per cent lower than a year ago. However, volumes are 7.5 per cent higher than the five-year average volume for the month of November.
Over in the public housing market, HDB rents dipped 0.1 per cent last month from October, though they are up by 1.6 per cent from November 2018. Compared to their peak in August 2013, HDB rents are still off by 14.5 per cent.
Mr Nicholas Mak, head of research and consultancy at ERA Realty, said a drop in private housing rental volume in November and December is expected as some expatriate tenants return to their home countries and some other decision makers enjoy their vacation.
"But the rise of the rental index points to the underlying robustness in the rental market," he said. "The 0.1 per cent drop in HDB rental index is a minor change and it could be due to the year end lull period."
He said rental rates could face upwards pressure next year as the new supply of completed private residential units, excluding executive condominiums (ECs), drops to 5,122 units, 70 per cent lower than the annual average supply of 17,055 units in the last five years.
Beyond 2020, official figures show the supply of completed private homes, including ECs, jumps to 11,958 units in 2021, 15,106 in 2022 and 18,637 in 2023.
The Monetary Authority of Singapore (MAS) noted in its annual Financial Stability Review released last month a "stability in rental prices" that suggests that occupancy demand is adequate at this juncture to absorb newly completed units. But MAS cautioned that the tepid economic outlook coupled with an expected increase in the supply of completed units in the medium term, could lead to new downward pressure on rentals.
As such, the MAS warned against over-leveraging, saying that investors that borrowed at higher mortgage repayments relative to incomes could face difficulties meeting the repayments on their investment properties.
For HDB flats, all room types experienced rent increases year on year: three-room flats by 1.7 per cent, four-room by 1.4 per cent, five-room by 1.1 per cent and executive flats by 3.4 per cent.
There were 1,842 HDB flats rented in November, almost unchanged from the 1,840 units in October.
Four-room flats were again most popular last month, making up 34.1 per cent of total rental volume, followed by three-room flats with 33.4 per cent. Five-room flats accounted for 26.5 per cent of volume, and executive flats 6 per cent.
HDB rental volumes are down 3.2 per cent from November 2018, and are also 2.1 per cent lower than the five-year average volume for the month.