We have less foreigners in Singapore than there are new condos
The number of new foreigners coming to Singapore has dropped since 2012, with restrictions on hiring, and the double whammy of record number of Condos to be completed, does not bode well for the Residential leasing market.
SRX Property said rents for private condos and apartments fell 0.5 per cent in June from the month before; these were led by a 0.8 per cent drop in rents in the city, and a 0.7 per cent drop for those in suburban areas. Rents in the city-fringe areas were unchanged. Year on year, rents in June were down 6.5 per cent from June last year, and down 12.4 per cent from their peak in January 2013. Transactions wise, rental volume rose slightly. A total of 3,777 units were rented in June, 1 per cent more than the 3,739 units rented in May. (extracted from “Weak Residential Leasing Persists in Singapore” The Business Times – 16th July 2015
You can observe from the graph that the rentals have reached October 2010 levels and appear to still be heading downwards. The critical support level has to be in October 2009 level.
According to the SRX Property Price Index for Non-landed Private Rentals:
- Year-on-year, rents in June 2015 down 6.5% from June 2014.
- Rents in June are down 12.4% compared to peak in January 2013. Rents in May has been revised from a 0.6% decrease to a 0.8% decrease.
With new units coming onto the market Tenants that used to share units were now able to get better units and not have to share. Being able to enjoy a higher standard of living at about the same price. We believe that this will be the direction. Tenants will move from older developments to newer ones and be able to secure the units at the same rates (or maybe lower).
For Landlords with units up for rental – you will need to do more to attract tenants, like sprucing up the unit, with some minor renovations, new aircon systems and furniture will help get your unit rented out faster.
For Tenants, go for shorter 12 month leases, that way you can have the option to leap frog to a better unit when your lease is up. To plan ahead, you can drop us an email for a list of the upcoming developments that are due for TOP in your desired area.