SINGAPORE - The quiet rental market for private condominiums/apartments and Housing Board flats saw a sudden surge in demand last month, with market observers saying measures taken in response to the coronavirus pandemic were the likely cause.
According to flash data from real estate portal SRX Property, the private rental market saw a 10.9 per cent jump in units leased, to 5,244 units last month from 4,730 units in February.
While March's rental volume was 5.9 per cent lower than the same month a year ago, it was 7.6 per cent higher than the five-year average volume for the month.
Over in the HDB rental market, leasings rose last month by 15.4 per cent to 2,157 flats versus 1,869 in February. Year on year, HDB rental volumes were down by 11.3 per cent from March 2019. They were also 4.7 per cent lower than the five-year average volume for the month.
The rental volume increase could be attributed to a few possible reasons, said Orange Tee & Tie's head of research and consultancy Christine Sun.
Existing tenants could have chosen to renew their contracts, as they were reluctant to scout for new dwellings, to minimise their chances of getting the virus, while others who returned from overseas may have needed a place to complete their stay-home notice, she said.
Some Malaysian workers may have also scrambled to rent a unit before the lockdown was imposed in their country, while others could have also rushed to commit to a unit before the circuit breaker measures started in Singapore, Ms Sun added.
The SRX data also showed that rents for private condos and apartments inched up 0.2 per cent despite the virus outbreak weighing on property market sentiments. Ms Sun said this may be due to the sudden surge in rental demand, with some landlords increasing their asking prices.
"However, we have also observed that some landlords gave rebates or discounts to help their tenants whose livelihoods have been affected by Covid-19," she noted.
Year on year, private rents are up 3.2 per cent from March 2019, and still down 15 per cent from their peak in January 2013.
Unlike private apartments, HDB flats saw no increase in rents last month. Instead they dipped 0.5 per cent month on month. This could be due to the increasing supply of HDB flats eligible for rental after the minimum occupation period, outweighing the increased short-term demand for rental units.
Year on year, HDB rents are up 1.5 per cent, while still 13.7 per cent off their peak in August 2013.
Looking ahead, if the Covid-19 situation continues to worsen and Singapore sees a temporary pullback in foreign employment, this will hurt the rental market.
"There could be some downward pressure on rental prices and leasing volume. We estimate that rents may dip up to 3 per cent for the whole year in the worst-case scenario," said Ms Sun.