Property websites 99.co and SRX report that overall rents climbed 33.2 per cent in January compared to the same month last year. HDB rents increased by 27.5 per cent, while HDB rental transactions decreased by 16.1 per cent.
Rents for local non-landed private housing rose for the 25th consecutive month, climbing 1.4 per cent in January, although the rate of increase slowed and the number of transactions decreased.
Local non-landed private rents rose for the 25th consecutive month in January, but the rate of increase slowed significantly to 1.4 per cent from 3 per cent in December last year, according to estimates released by property websites 99.co and SRX on Tuesday (February 28).
Hopeden Group Chief Executive Officer Yap Yun Ming said that non-owner occupied property tax was raised this year and homeowners intended to pass on the increase to their tenants, but tenants resisted because of the record high rents in December, resulting in a smaller increase in January.
According to Sun Yanqing, Head of Industrial Research and Consulting at OrangeEase, the slowdown in growth was either because rents had already risen significantly over the past year, or because January coincided with the Lunar New Year and fewer people were looking at properties, resulting in lower transaction volumes.
The report revealed that the largest increase in rents in January was for non-landed high-end private homes in the Central Core Region (CCR) at 1.8 per cent, 1.7 per cent in the Other Central Region (RCR) and the smallest increase of 0.8 per cent in rents for mass market private homes outside the Central Region (OCR).
Overall rents climbed by 33.2 per cent compared to the same period last year, with the most significant increase of 34.1 per cent for other central districts, 33.3 per cent for mass market private housing and 31 per cent for the core central districts.
In terms of rental transactions, the report estimates that a total of 6,285 rental units were sold in January, down from 6,345 in December and 7 per cent below the five-year average. The highest number of transactions took place outside the Central District, at 37.9 per cent, followed by non-landed private homes in other Central Districts, with the lowest number of lease transactions in high-end private homes, at 28.9 per cent of total transactions.
Mohan Sandrasegeran, senior analyst at One Global Group Research, believes that rents will continue to grow. He noted that the rise in private rents was mainly driven by demand for high-end private housing, especially for units with a monthly rent of $10,000 or more.
Mohan said, "Although these high-rent transactions represent a small proportion of the total volume, they have an impact on the overall rental rise."
He believes that Singapore remains attractive to expatriates and high net worth individuals, and therefore expects this trend to continue in the short term.
Sun Yanqing expects rental growth to remain moderate as more non-landed private homes and HDB flats are completed during the year, current tenants will move into their new homes to vacate their units, and new private home owners will rent out their newly completed units, so market supply will increase. "The opening of the Chinese border and the return of more expatriates will absorb some of the increased supply and mitigate the sharp fall in rents."
Yap Yun Ming believes that despite the reopening of the Chinese border, the economic outlook for this year is still full of uncertainty and some owners of older private homes may adopt a defensive strategy to retain their original tenants, which could slow down rental growth to 10 to 15 per cent this year.
On the other hand, 99.co and SRX also reported that overall HDB rents climbed by 0.6 per cent in January compared to December, with rents in mature and non-mature HDB areas increasing by 1.4 per cent and 0.2 per cent respectively. Executive Condominium (EC) rents increased by 2.9 per cent.
Overall, HDB rents increased by 27.5 per cent over the same period last year, while rental transactions decreased by 16.1 per cent.
