Forum: Landlords not always to blame for high rentals
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There have been numerous reports about the high-rental trend in Singapore, implying that landlords have been unreasonable in this regard (Demand causes rents for some 5-room HDB flats to soar to over $6,000, April 29). I would like to offer another perspective on the issue.
The high-rental environment is a result of several factors.
Home owners are at the mercy of lenders. Higher mortgage rates need to be factored into higher rentals by home owners.
Perhaps banks, which have continued to report record earnings, should be “encouraged” to lower their interest charge to reduce the overall cost of borrowings.
Property tax has increased in 2023 and another hike is expected in 2024. Private property maintenance fees have also gone up with higher inflation and salaries. The cost of repairs for fittings has also risen. The goods and services tax has risen to 8 per cent, with another rise due in 2024.
Rentals are fixed regardless of these increases, and these variable components have to be considered by home owners to avoid a negative yield on their investments.
Before the Covid-19 pandemic, rentals were lower as there was more housing supply than demand.
There was not much reporting at that time about low rentals, and home owners were at the mercy of tenants.
Sunil Kumar
