Rental demand surge likely due to anti-virus measures

The sleepy rental market for private apartments and Housing Board flats roared into life last month, with measures taken in response to the pandemic the likely cause.

The number of units leased in the private rental market hit 5,244 last month, up 10.9 per cent on the 4,730 recorded in February, according to flash data yesterday. While last month's rental volume was still 5.9 per cent lower than the same month a year earlier, it was 7.6 per cent higher than the five-year average volume for the month.

HDB leasings surged 15.4 per cent from February to last month with 2,157 flats rented, noted real estate portal SRX Property. But that was down 11.3 per cent from March last year and 4.7 per cent lower than the five-year average volume for the month.

Last month's higher rental volume could be attributed to a few possible reasons, said Ms Christine Sun, Orange Tee & Tie's head of research and consultancy.

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 people 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 rushed to commit before the circuit breaker measures kicked in, Ms Sun added.

SRX's flash data also showed that rents for private condos and apartments inched up 0.2 per cent. 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."

Private rents were up 3.2 per cent from March last year but still down 15 per cent from their peak in January 2013.

Rents for HDB flats dipped 0.5 per cent month on month. This could be due to the increasing supply of units eligible for rental after the minimum occupation period outweighing the increased short-term demand for rental units. HDB rents were up 1.5 per cent over March last year but still 13.7 per cent off their peak in August 2013.

The rental market could suffer if the Covid-19 crisis worsens and Singapore sees a temporary pullback in foreign employment. Ms Sun said: "We estimate rents may dip up to 3 per cent for the whole year in the worst-case scenario."