Rents appear to be holding up at new completions on the city fringe, although suburban condo rents are increasingly under pressure.
Tenants have the luxury of choice now, and are typically moving to affordable units in central locations, and often preferring newer condos as well, experts said.
"Suburban projects, and projects which do not have large-scale facilities, may lose out in the chase for tenants. Older developments are also losing out tenants to newer developments," said Mr Eugene Lim, ERA Realty's key executive officer.
SRX Property data shows that the median rent at D'Leedon in Farrer Road, completed in the fourth quarter of last year, was $4,288 per month in the second quarter, or $3.57 per sq ft (psf) per month. Mr Lim called such rents "decent".
D'Leedon's rents were below those at nearby Waterfall Gardens, a five-year-old estate that posted a median monthly rent of $3.92 psf in the second quarter. Far larger units meant rental quantum was far higher as well, at $8,600 in the quarter.
The relatively lower rents at D'Leedon reflect stiff competition for tenants after the 1,715-unit project was completed, said Century 21 chief executive Ku Swee Yong, coming at the same time that the rental market was trending down. "Waterfall Gardens... does not have smaller units of one bedroom or studios, so there is a certain amount of prestige even though it is older."
The median rent at Sky Habitat, completed in the second quarter, was $3,000 per month, or $4 psf in June and July.At the 15-year-old Bishan 8 nearby, the median rent was $3.27 psf in the quarter, but higher on a quantum basis at $3,800.
In a better market, projects such as D'Leedon and Sky Habitat could expect rents of $4 psf to $5 psf per month, Mr Lim of ERA noted.
But rents have been falling across the board, and were an estimated 12.5 per cent lower in July than at their recent peak in January 2013, according to SRX Property. At Waterfall Gardens, median psf rents fell 6.7 per cent over the last two years, and at Bishan 8 they dipped 11.6 per cent over the same period.
Suburban rents are generally lower. Woodhaven in Woodlands, completed in the first quarter, had a median monthly rent of $2,100 or $2.98 psf in the second quarter, while the 10-year-old Casablanca nearby was lower again at $2.65 psf, although quantum rents were at a higher median of $2,800 on larger units.
Median rents of less than $3 psf are poor, said Mr Lim, who added that tight labour policies are resulting in a "very practical" leasing market, where most tenants go for 12-month leases. Increasing completions will continue to hit rents. "The mid-range budget of $3,000 to $6,000 is the most active - and within that range, a tenant would try to get the best possible deal."
So suburban rents are under more pressure than those in the city fringe or central areas although larger central city units may be feeling the heat as fewer tenants can stump up monthly rents of about $10,000.
"There are definitely headwinds in upcoming demand for rental units," added Mr Ku of Century 21.
"With commodities at an all-time low and headwinds in the financial services as well, expat headcount is likely to be flat, if not dropping."