Rents increased but volumes dropped
According to new statistics from real estate websites 99. co and SRX published on Wednesday, rents for both Housing Board flats and private apartments increased in September compared to August, while leasing volume declined in both sectors for the 4th consecutive month (Oct 13).
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After holding steady for the previous three months, condominium unit rents climbed by 0.7% in September over August.
In September of last year, annual rentals increased by 8% but were still down by 10.3% from their high in January.
The opposite is true: HDB apartment rentals grew for the 15th month in a row in September, increasing by 0.6% over August.
Despite an 8.8% increase from September of the previous year, HDB rentals were still 6.8% below their peak in August of that year.
Apart from four-room flats, all HDB unit types saw a rise in September in rental prices. Mature estates witnessed a 1% rise, while less mature estates saw a 0.10% gain.
The rising rental prices may be due to a shortage in housing supply due to the sale of many HDB resale flats and condominiums in the area, according to Christine Sun, senior vice president of research and analytics at real estate company OrangeTee & Tie.
Compared to August, fewer customers leased condos in September, with volumes down 0.7% to an estimated 4,454 units.
Most rental units were in the suburbs, accounting for 39% of the total rental volume.
In September, there was a 0.5% decline in HDB apartment rentals from an anticipated 1,702 units in August.
According to Sun, as the year draws to a close, leasing demand tends to wane.
To take advantage of the different government funds available to tide them over the epidemic, she speculated that more enterprises may have upskilled current employees or employed more locals.
This has resulted in a slower increase in rental demand since foreign expats' job growth was less than that of the local population.
Huttons Asia CEO Mark Yip said that the rental volume looked to have peaked in both markets in September, with "little incremental demand" in the number of renters.
The establishment of VTLs, on the other hand, will offer a "much-needed salve" for the rental industry by allowing travellers to enter Singapore without having to wait a long time for quarantine.
According to him, "this would enhance Singapore's appeal as an important global corporate centre, generate more employment, and raise housing demand."
To this end, OrangeTee's Sun said that when more VTL announcements are made, more Singaporeans will return to the country, and permanent residents and foreigners will increase their employment of overseas ex-pats.
According to her, this might increase rental costs in certain areas as rental demand improves.