Rents for private apartments up, snapping 6-month slide

Rents for condominiums and private apartments reversed a six-month slide, rising 1.3 per cent in January from the previous month, according to flash estimates released yesterday by SRX Property.

The rebound was across all locations, with rents going up by 0.9 per cent in the prime areas, 1.6 per cent in the city fringes and 1.3 per cent in outlying areas.

Year on year, private home rents last month are still down 5 per cent from January 2016, and 18.9 per cent off their peak in January 2013.

There is little hope for a sustained recovery for rental rates of private homes going forward, said R'ST Research director Ong Kah Seng.

"January 2017's rental increase could be a one-off exuberance in leasing demand, which is unlikely to be sustainable, given there are still so many private residential units vacant amid substantial new completions in 2015 and 2016," he said.

More private leasings were also achieved last month, with the number of units rented out up by 5.8 per cent to 3,813 units. Year on year, rental volume last month was 0.7 per cent higher than 3,785 units rented in January last year.

In recent times, however, monthly lease take-ups tend to be more volatile as two-year leases have decreased in popularity while the one-year lease has become the norm, Mr Ong noted, which makes it hard to tell if leasing demand is improving based on the number of leases signed each month.

The Housing Board market, meanwhile, saw rents drop 0.6 per cent in January from the previous month, after they edged up by a revised 0.1 per cent in December.

Month on month, rents for four-room, five-room and executive flats declined by 0.8 per cent, 1.5 per cent and 0.3 per cent respectively. Rents for three-room flats inched up 0.2 per cent.

Year on year, rents last month were down by 4.8 per cent from January 2016, and 12.7 per cent lower than their peak in August 2013. The number of flats rented out in January dropped by 16.1 per cent from the previous month to 1,427 flats.

A version of this article appeared in the print edition of The Straits Times on February 16, 2017, with the headline 'Rents for private apartments up, snapping 6-month slide'. Print Edition | Subscribe