Singapore
RENTALS for condominiums and private apartments dipped 0.6 per cent in May, leading analysts to affirm the trend of a tenants' market which they say may extend into 2016.
SLP International executive director Nicholas Mak said: "This is mainly due to the new supply outweighing demand, especially in the suburbs."
More project completions have led to higher competition for tenants, with even existing tenants scouting around for better deals now that the bargaining power is back in their hands.
In line with this, landlords are more willing to lower rentals, including when leases are about to expire, in the hope of retaining the tenants.
Mr Mak also noted a gradual "flight to quality", where tenants move to better-located premises when their leases expire. This would contribute to a support of rental rates in Core Central Region, followed by the city fringe.
In May, rents in the prime central area bucked the trend with a 0.2 per cent rise, while rentals in the city fringe and suburbs fell 0.6 per cent and 1.5 per cent respectively, according to the SRX Property Price Index for non-landed private residential rentals released on Wednesday.
ERA Realty key executive officer Eugene Lim noted that while the non-landed private residential rental market had shown signs of recovery in April (a 0.1 per cent uptick), May's performance was "pessimistic".
"This puts initial projections of a market recovery into doubt. We have to adopt a wait-and-see attitude for a longer period of time before the market can be said to have stabilised," he said.
R'ST Research director Ong Kah Seng added that overall leasing demand remained weak, as companies cut back on expatriates' housing budget. Rents in May were down 6 per cent year on year, and down 11.7 per cent from its peak in January 2013, SRX data showed.
Private rental volume fell slightly. About 3,337 units were rented in May, 3 per cent lower than in April, but Mr Lim of ERA believes that the strong 6.2 per cent year-on-year growth indicates an underlying demand for rental properties still.
Consultants expect rents to continue to fall, as 2015 and 2016 see record numbers of private residential units completed.
"Looking forward, it is likely that transaction volumes remain robust on the back of depressed rents. This, coupled with higher numbers of available units, suggests strongly that it will be a tenant's market for this year and next," Mr Lim said.
On the public housing front, HDB rents were flat in May compared to April, SRX data showed. Rents of HDB three and five-room flats fell 0.5 per cent and 1.1 per cent respectively, while four-room and executive flats saw a 0.4 per cent and 2 per cent increase in rents.
HDB rent change in April has also been revised from a 0.7 per cent decrease to a 0.5 per cent decrease.
HDB rental volume rose slightly in May, with about 1,798 flats rented, a 1.6 per cent increase from 1,770 units in April.
"Overall HDB rents are quite stable, and have good stable demand for S$2,400 and below," said Mr Lim.
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