Housing rents edge up but decline in volumes continues

A view of Housing Board blocks and private houses in Toa Payoh.
A view of Housing Board blocks and private houses in Toa Payoh. PHOTO: ST FILE

Rents inched up last month for both private and public housing, but the decline in the numbers of units rented continued, according to flash estimates yesterday.

These noted that rents for both residential segments rose 0.2 per cent from April.

Year-on-year, rents from non-landed private homes advanced a marginal 0.8 per cent, but May's levels were 18.9 per cent below those of January 2013.

Rents of condominiums and private apartments did not budge in the prime or Core Central Region from April to May, while they edged up 0.4 per cent in the city fringe or the Rest of Central Region as it is sometimes known.

They were 0.2 per cent higher in the suburbs or the Outside Central Region zone, said data from real estate portal SRX Property.

OrangeTee & Tie head of research and consultancy Christine Sun noted the robust demand in certain areas, especially homes near good schools and MRT stations, and for bigger units.

"Some of the demand could be from the recently displaced en bloc owners," she said. "Some owners seemed to have a stronger preference for larger units in the city fringe areas or mass market region that are close to their old residences."

  • 0.2%

    Increase in rents for both private and public housing in May.

Rental volumes declined 3.2 per cent to 4,674 units from April to May. These were also 5.2 per cent lower than in May last year.

HDB rents were down 2.7 per cent from May last year and 15.3 per cent below their August 2013 high.

ZACD Group executive director Nicholas Mak said this could be due to more Build-To-Order (BTO) flats reaching their five-year Minimum Occupation Period (MOP).

"A significant supply of BTO flats was offered for sale between 2010 and 2013. The new flats that have reached their five-year MOP could be offered up for rent, therefore increasing the supply of rental flats in the market," he added.

Rents for three-room flats fell 0.4 per cent in May from April, and were down 0.7 per cent for executive flats. Four-room flat rents rose 1.1 per cent and were up 0.2 per cent for five-roomers.

Rental volumes fell 12 per cent to 1,885 flats from April's showing - 1.6 per cent lower than in May last year.

A "gradual and gentle upwards trend" in the private rental index can be expected for the rest of the year, said Mr Mak, as the employment market improves and the demand for foreign talent rises. This could spill over to the HDB market and perhaps cause its rental index to bottom this year, he added.

In contrast, Ms Sun believes "the closing gap between public and private home rentals may continue to impact the HDB rental market".

"However, larger HDB units may see some respite as some displaced en bloc owners may rent these units for their space and affordability," she added.

A version of this article appeared in the print edition of The Straits Times on June 14, 2018, with the headline 'Housing rents edge up but decline in volumes continues'. Print Edition | Subscribe