Demand rising in tandem with arrival of more expats
Private home rents are finally on the way up, official data shows.
But there is some anecdotal evidence that the rental market has since slowed in some areas.
Data from the Urban Redevelopment Authority (URA) a fortnight ago shows private home rents rose by 4.7 per cent in the first quarter. This is a clear improvement on the 0.6 per cent rise in the previous quarter which followed five quarters of rental decline.
Leasing activities have picked up as more expatriates arrive, and this year could turn out to be as busy as 2007, said Mr Patrick Lai, director of corporate residential leasing at Savills Singapore.
Most of them are still from the biomedical, pharmaceutical and petrochemical industries, he said.
But Mr Lai added: 'We are seeing a lot of returnees from the financial services - and bankers are the ones with deep pockets.'
Agreeing, CBRE executive director, residential, Mr Joseph Tan said: 'The recovering Singapore economy has resulted in positive business sentiment and expansion plans, especially in finance and banking.
'Some top-level executives were known to have relocated from Britain to Singapore to enjoy some tax savings.'
Experts said rentals for good class bungalows and detached houses are up as their supply is limited.
Area-wise, the city centre is likely to do better than the city fringes or suburbs, said Mr Tan. URA data shows the median rents of some residential buildings in districts 9 and 10 such as The Claymore have grown by 1 to 27 per cent in the last six months.
The prime districts, and increasingly downtown Marina Bay and Sentosa Cove as well, are favourite locations for expatriates because of their amenities, network of foreigners, and accessibility to international schools, Mr Tan said.
As for the other areas, things are not as bright, though some parts are doing better. Rentals for both non-landed and landed homes in the Serangoon Gardens and Lorong Chuan areas, for instance, are heading up because of the presence of the Australian and French international schools there, said Mr Tan.
URA data shows that rents of non-landed homes in the city fringe areas and suburban spots rose by 4 per cent and 4.8 per cent respectively in the first quarter.
Rents of non-landed homes in the core city centre, or what URA calls the core central region, rose the most, at 5.3 per cent.
URA's second-quarter data will not be out until end-July but already, some agents are seeing more supply in certain parts of the market.
'The rental volume is there but lessees have more choices now. Quite a few projects were completed in the past few months and they will have created more competition in the market,' said ECG Property Group chief executive Eric Cheng.
The market did recover quite a bit earlier this year but things have slowed since then, with rentals staying mostly flat, said a seasoned agent who declined to be named.
In particular, the mid-tier rental segment - homes asking for about $3,500 to $8,000 a month - is expected to see even more supply than demand as more projects such as Sky @ Eleven and Southbank are completed, experts said.
An executive about to sign a lease for a three-bedroom apartment of some 1,500 sq ft in Upper Bukit Timah for $3,000 a month said the landlord had lowered the rent from $3,500 a month. 'Rents are very negotiable now,' she said.
Mr Tan said business prospects could remain favourable for the rest of the year, based on the Government's projection of gross domestic product growth of 7 per cent to 9 per cent this year.
'But the Greek financial crisis may put a dampener on the global markets,' he cautioned.
'Although companies may continue their expansion plans, they might not review their housing budget for expatriate staff. This is likely to check the rise in residential rents for the rest of the year.'
Source: Sunday Times, 9 May 2010
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