Housing rents inch up last year, but still far from 2013 peaks

Last year proved a positive one for landlords, but the rental market remains far below its peak, according to numbers out yesterday .

Flash estimates noted that rents for private non-landed homes rose 3.7 per cent over 2018 while the number of leases signed also increased. However, rents last month were 0.9 per cent lower than in November and 16.6 per cent below their peak in January 2013. But there were 1.2 per cent more private non-landed units rented than in December 2018, real estate portal SRX Property noted yesterday.

Rents in all areas in December were up on the same month in 2018. Rents in the prime or core central region rose by 3.9 per cent, those in the city fringe or rest of the central region 4 per cent and those in the suburbs or outside central region 3.1 per cent.

Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said the increase in private rental prices could be due to fewer units being available. "Last year, the number of completed homes fell for a third consecutive year and it was about a third of what was completed in 2016. Many homes were (also) demolished to make way for newer developments after the last collective sales cycle."

Apartment and condominium leases rose 2.3 per cent last year to 58,236.

December rents in the Housing Board market rose 1.3 per cent from the same month in 2018 and inched up 0.1 per cent from November. But last month's levels are down 14.3 per cent from the August 2013 peak.

SRX data showed rents for three-room HDB flats were down a touch, but rents for other flat types rose by between 1.3 and 2.1 per cent.

The higher rents last year came on the back of a 1.9 per cent rise in the number of leases to 23,958, but there was a late-year dip with 1,753 HDB flats rented in December, 8.6 per cent fewer than in November.

Four-roomers were still the most popular flat type last month, making up 35.9 per cent of the total number rented. They were followed by three-room flats, five-room flats and executive condominium units.

Mr Nicholas Mak, head of research and consultancy at ERA Realty, said December's lower volumes were typical of "the seasonal year-end lull period".

"(This) softened the rental transaction volumes marginally for both the private residential and HDB leasing markets... as some decision-makers were away for holidays."

He said the number of units leased for non-landed private units and HDB flats could rise by 1.5 to 2.5 per cent this year if "the employment market remains healthy".

 

Around 24,500 HDB flats will reach the five-year minimum occupation period this year, while 5,100 or so private residential units will be completed. Mr Mak said some of these units will be up for lease.

A version of this article appeared in the print edition of The Straits Times on January 16, 2020, with the headline 'Housing rents inch up last year, but still far from 2013 peaks'. Print Edition | Subscribe