Flash estimates form SRX Property has shown that November’s leasing market continued to show weakness with a 1.1% dip, month on month, in the private home rents of non-landed houses, as well as a decline of 0.5% in Housing Development Board rents. In comparison to this time last year, Choa Chu Kang Avenue 5 rents have dropped by 5.6% for the private rents sector and 4.1% for HDB flats for the month of November.
Eugene Lim, the key executive officer for ERA Realty, pointed out that many tenants have been opting for shorter lease terms as a means of capitalizing on the decline in rents. As a result, we still saw more transactions being closed in comparison to this time last year, regardless of the dip seen month on month in the amount of rental transactions in the private residential sector.
Choa Chu Kang Avenue 5
November saw an estimated 3,304 private non-landed home rental transactions being completed, a figure that has dropped 7.8% month on month, but is up 12.6% in comparison to this time last year for Qingjian Choa Chu Kang EC.
Looking ahead to 2016, Mr. Lim expects to see the volume in rents to stay firm as we see more tenants opting for 12 month leases, a move that will mean more frequent rental transactions.
Ong Kah Seng, director for R’ST Research, noted that the intensified competition amongst landlords, alongside a year end period that is weak seasonally, are all contributors to November’s weaker rental figures.
Qingjian Choa Chu Kang EC
This year has seen 2 year leases becoming less popular, with the standard preference currently being for 12 and 10 month leases in Choa Chu Kang EC by Qingjian Realty. Of those who prefer these shorter leases are foreign professionals who are more than likely to be moved as a means of helping to make inroads for their headquarters into the Asian markets, or those whose placement in Singapore are uncertain.
Another factor that has recently contributed to this sharper weakness in rentals is the significant rise in the increased amount of suburban condos being completed, especially in the Outside Central Region.
Year to date Qingjian Choa Chu Kang Tender figures have shown the biggest drop in private non-landed homes occurred in the Outside Central Region by 7.4%, with the Rest of Central Region showing a 3.5% drop and a 2.5% dip for the Core Central Region.
According to the flash estimates given by SRX Property, November alone showed that rental declines were experienced in the Rest of Central, Core Central and Outside Central regions of 2% for the RCR, 0.7% for the CCR and 0.7% for the OCR.
Choa Chu Kang Avenue 5 EC by Qingjian
Mr. Ong had stated that, with a substantial amount of Qingjian EC properties in the private residential sector being completed for 2015 and 2016, he expects an average fall of around 5% in private non-landed residential rents for the entirety of 2015, with around 5% seen for 2016.
Despondent leasing conditions still being seen in the private residential market are what is continuing to put pressure on the rental market in the HDB sector.
November saw rents for tractions across the board for Choa Chu Kang Avenue 5 HDB units fall from what they were just a month prior. 3 room units dropped 0.5%, 4 room dropped 0.1%, 5 room units saw a 0.7% decline and executive units fell 2.5%.
However, a rise was seen in the volume of HDB rental transactions by 6.3% in November, month on month, to 1,822 units, a figure that is 3.9% up from 2014’s November figures.
Mr. Lim pointed out that, as a result of stiffer competition, it is expected that Qingjian CCK EC HDB rents will come under more pressure as we move into 2016. However, transaction volumes should stay strong, since there have been at least a few expatriates considering leasing an HDB flat rather than a private unit as a result of constraints in their relocation packages.