Condo, HDB rental volumes plunge amid circuit breaker

Demand for renting both private apartments and Housing Board flats plunged last month because of the circuit breaker measures, which prevented prospective tenants from visiting and viewing properties offered for lease, said market observers.

The month-on-month drops are also the largest in percentage terms since at least 2011.

The number of non-landed private homes leased fell by 36.5 per cent, to an estimated 3,068 units in April from 4,829 units in March, according to flash data released by real estate portal SRX Property yesterday.

April's rental volume for these private flats was not only 40.6 per cent lower from a year ago, but it was also 32.3 per cent lower than the five-year average volume for the month.

Over in the HDB rental market, leasings fell last month by 36.7 per cent to 1,260 flats compared with 1,990 in March.

HDB rental volume last month was also down by 41.3 per cent from a year ago. It was 39.3 per cent lower than the five-year average volume for April.

Of the leasings last month, 36.1 per cent were for four-room flats, 30.8 per cent for three-room units, 26.5 per cent for five-room units, and 6.6 per cent for executive flats.

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

Travel restrictions imposed by many countries have significantly reduced the number of foreign expats who could enter Singapore for work, she said.

Many workers from neighbouring countries such as Malaysia remain in their home countries due to the coronavirus outbreak. As a result, travel restrictions and border controls seem to have affected the rental market here, Ms Sun added.

The SRX estimates also showed that rental prices for private condos and apartments dipped 0.9 per cent.

Private rents last month were up 1.8 per cent from a year ago, but down 15.7 per cent from their peak in January 2013.

For the HDB rental market, SRX data also showed that rents in April fell by 0.2 per cent from March.

Rents for flats in mature estates fell 0.9 per cent, while those in non-mature estates rose 0.7 per cent.

Based on flat size, rents for three-room and executive units fell by 0.3 per cent and 1.6 per cent respectively, while rents for four-room flats increased by 0.1 per cent and rents for five-room flats remained stable.

HDB rental prices rose 1.3 per cent last month from a year ago, but they were still 14.1 per cent down from their peak in August 2013.

Executive flat rents decreased by 0.7 per cent, but rental prices for all other HDB flat types rose year on year - three-room units by 1.5 per cent, four-room units by 1 per cent and five-room units by 1.3 per cent.

Rents for flats in mature and non-mature estates also rose year on year by 0.3 per cent and 2.3 per cent respectively.

Looking ahead, observers said the rental market may continue to face challenges in the coming months as companies adopt a more conservative hiring outlook and prospective tenants are not allowed to visit and inspect the properties for lease during the circuit breaker period.

Mr Nicholas Mak, head of research and consultancy at ERA Realty, said: "The chilly impact of the pandemic will be felt by the leasing market even after the circuit breaker is lifted. This is because the employment market is expected to contract, leading to some foreigners losing their jobs.

"As a result, leasing demand will decrease, which will eventually lead to a 2 per cent to 4 per cent year-on-year decline in the private residential and HDB rental index for the whole of 2020."

He added that if the pandemic had not struck, non-landed private housing rental rates could have risen 1.5 per cent to 3 per cent this year.

This was because the supply of completed private homes in 2020 was expected to be relatively low compared with the annual supply in the last 10 years, and Singapore's employment market was quite stable with a high employment rate before the Covid-19 outbreak.

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A version of this article appeared in the print edition of The Straits Times on May 14, 2020, with the headline Condo, HDB rental volumes plunge amid circuit breaker. Subscribe