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Condo rents fall again to near-4-year low in Oct

SINGAPORE — In another sign that the leasing market is turning in favour of tenants, rents of non-landed private residences fell to their lowest in nearly four years last month as the increase in supply of homes being offered for rental outpaced the growth in the tenant pool.

Private-home rental prices fell 0.9 per cent last month, the ninth straight month of decline. Photo: Reuters

Private-home rental prices fell 0.9 per cent last month, the ninth straight month of decline. Photo: Reuters

SINGAPORE — In another sign that the leasing market is turning in favour of tenants, rents of non-landed private residences fell to their lowest in nearly four years last month as the increase in supply of homes being offered for rental outpaced the growth in the tenant pool.

Private-home rental prices slipped 0.9 per cent last month — the ninth consecutive month-on-month decline — with the reading of the rental index compiled by the Singapore Real Estate Exchange (SRX) at its lowest since January 2011, a flash report by the SRX showed yesterday. Compared with the same period last year, October’s rents were 5.3 per cent lower.

The suburban area, or the Outside Central Region (OCR), led the decline with a 1.5 per cent month-on-month fall. The city fringes, or the Rest of Central Region (RCR), registered a 1.1 per cent decrease while that in the city centre, or the Core Central Region (CCR), dipped 0.7 per cent.

Mr Eugene Lim, key executive officer of property agency ERA, said: “The continued drop in rents is expected as it is currently a tenants’ market. Tenants have strong bargaining power as the current supply glut and declining expat demand are pushing down rents.”

An estimated 3,208 new leases were signed last month, 1.3 per cent lower than September’s 3,250 units, the SRX report showed.

Analysts said the downtrend was expected to continue in the coming months as more private homes will be completed, adding to the stock of units competing for tenants.

Mr Nicholas Mak, executive director of SLP International Property Consultants, noted that around 55,000 non-landed private homes would be completed from the fourth quarter of this year to 2017.

“Without a substantial increase in the population of foreigners to boost the leasing demand in both the private and HDB (Housing and Development Board) housing markets, rental rates are likely to continue slipping gradually in 2015,” Mr Mak said.

The public-home sector also saw weakness in the leasing segment last month, with rents of HDB flats falling 0.5 per cent, the second straight month of decline after a slight rebound in August. However, rental volume inched up 0.8 per cent to an estimated 1,559 units from 1,546 units in September.

Mr Lim said one reason for the softening in HDB rents is competition for tenants from private home owners in the OCR. “The competition for tenants from suburban private-property owners, who are lowering their rents of family-sized units to S$2,500 to S$3,500 a month, is drawing tenants away from the HDB rental market.”

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