Condo rental prices increase after 7-month drop

Rents at condominiums began to rise in March after seven months of falling rents. This is due in part to a healthy rental demand after the Chinese holiday period in February.

Rentals for HDB flats as well as condo units recovered after February’s decline. This is based SRX’s and’s April 18th flash estimates.

Due to the increased demand for condominiums, rents have risen by 0.3%. The data shows that year-onyear, condo rents are down by 3.4%.

Rental volumes meanwhile rose 19.1 percent on the month in March. They were 5,677 compared to 4,766 for February.

Rents in March 2014 were 14,9% higher year on year than the previous month, but 6,9% lower than the five year average.

Property analysts attribute the growth in demand of condo rentals to a narrowing price difference between HDBs.

This makes condos more attractive for some tenants.

Some analysts think that landlords are compromising more on their rents, which could explain the increase in leasing demand.

To at least cover mortgages and taxes, many landlords prefer renting out their condos rather than leaving them vacant.

As the rental gap remains substantial, it is less common for tenants to switch from HDBs into condos.

HDB rental prices are still cheaper than condos due to the high demand for rentals that will be lower as inflation rises.

Singapore’s slower economic growth could mean a decrease in the demand of foreign workers. This will lead to lower rental demand both for HDB housing and for private housing.

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Additionally, there will be a constant supply of newly built private housing units in the coming two years as well as HDB Flats that can be rented to their owners.

Outside Central Regions (OCRs) were responsible for the majority of leasing in March. 36.4% was the volume. The Rest of Central Region accounted 32.6% of all rental volumes. Core Central Region accounted only for 31.6%.

Rents at the RCR rose by the most amount, 0.9 %, followed by those at the CCR, where they increased by 0.3 %. Rents for the OCR dropped by 0.3 percentage points.

In all regions, rental prices declined compared to the prior year. CCR had the biggest drop in prices (5.5%), followed by RCR (2.6%) and OCR (2.1%).

HDB’s rents are also up for the 2nd consecutive month. The increase is 0.6 percent compared to February. Not only did rents increase across mature and unmature estates but they also increased for all room types.

Rents at mature estates grew by 0.6% in a month. They were 7.5% higher on an annual basis.

HDB flats that are larger commanded higher rentals in March. Five bedroom flat rents went up by 1.5%, while executive apartment rents rose to 1.35%. The four-room rents showed a slight rise of 0.3 percent while three room rents rose 0.8 percent.

HDB leasing also increased in March by 9.8% to 2,689 units rented, up 248 flats from February.

However, the volume of goods sold in March was 11 per cent below the five-year monthly average.

Some of the increased demand for HDBs could be due primarily to Malaysians who are looking to get jobs in Singapore because of the stronger Singaporean dollar. Some may decide to stay in Singapore and not commute everyday.

Rents for four-roomed apartments continued to rise, with 36.3 percent of all volumes in March. This was followed by rentals for three-roomed apartments (33.6 per cent), and then five-roomed apartments (24.5 per cent). HDB rental volumes only comprised 5.7 percent executive flats.

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