According to Savills, the tight private rental market will be eased. An increase in the supply of private housing this year and the global economic downturn, which has led some companies to reduce their expatriate workforce, will reduce the pressure on private rental rates. Private rents are expected to grow by double digits in the first half of the year, and may decline by 2 to 3 per cent in the second half.
I think rents will peak at the end of the second quarter and start to slow down in the third and fourth quarters, as landlords start to feel that it is taking longer to rent out their homes and that those who insisted on higher rents earlier will have to give in sooner or later," said Cheung Man-cheung, senior director of research and consultancy at Savills.
As for HDB rental market demand, it remains strong. Property experts say that in addition to rental demand from foreigners and students, some HDB upgraders are opting to sell their HDB flats before buying private homes after the government raised the additional buyer's stamp duty late last month, and must rent temporarily while they wait.
OrangeEasy's Vice President of Industrial Research and Analysis, Sun Yanqing said, "Going forward we also expect more private and HDB flats to be completed, so with the increased supply we expect rental growth may slow down this year and could be as high as 15 to 18 per cent for the year."
Experts say this also means that this year's annual rental increase will be almost half less than last year's increase of about 30 per cent. And more people will also consider renting, more affordable HDB flats.