Thursday, June 18, 2009

A rental boost from foreign students

SINGAPORE’S drive to become an education hub is providing a form of support for the home leasing market.

According to property and student agents, more international students in Singapore are turning to condominiums for accommodation even as the more traditional hostels and HDB flats remain in hot demand.

The influx of foreign students has visibly strengthened since the Economic Development Board launched concerted efforts to woo this bunch under the 2002 Global Schoolhouse Initiative.

From numbering 61,000 since 2003, when such annual figures were made available, international students here have surged by nearly 60 per cent to 97,000 as of last year, show Singapore Tourism Board statistics.

The official goal is to host 150,000 international students here by 2015. But already, this growing group’s presence is making itself felt in the home rental market.

Even though official data show that private rents have fallen 14.7 per cent from its peak in the third quarter of last year, it is a different story in areas like Boon Lay, Jurong West and Queenstown, say an ERA property agent who specialises in foreign student accommodation.

These are places where international students congregate, as they are near major tertiary institutions such as Nanyang Technological University (NTU) and the Management Development Institute of Singapore, said the agent, who wanted to be known only as Tony.

For example, the rent for a three-bedroom HDB flat in Boon Lay was about $1,300 monthly three years ago; now it can go up to $2,400, he said.

And the pullback in the overall property market has not necessarily brought down rents significantly. “Demand in that area is still quite high. Owners know that lots of students are looking for houses, so they are keeping prices high,” said Tony, a Vietnamese who is a former NTU student himself.
He estimates there are currently more than 400 Vietnamese students in NTU, compared to just about 70 five years ago.

“I encountered a case where the starting price was only $2,000, but because I brought in eight people (to share the flat), the owner managed to push up prices to $2,450,” he said.
Demand has also spilled over to the condominium segment.

Mr Lin Yu Wei, 23, a Taiwanese student of Raffles College in Beach Road, stays in Killiney Apartments in the Somerset area with two roommates, paying a monthly rent of $1,000.

“Most of my friends also prefer to stay in the city area. It’s nearer to our school and the shopping malls. Most of them will consider convenience as the most important factor,” he said.

Although he previously stayed in a cheaper student hostel, Mr Lin said he preferred his current environment as he has privacy and does not need to worry about his belongings.

On this recent trend, Kaplan Singapore’s deputy director of marketing, Mr Alvin Teo, said international students typically stay in hostels when they arrive, but move out together in groups to condos as they make friends.

“Some of the students, especially the Chinese ones, are quite well-to-do. Their parents want the best for them and opt for condos,” said Mr Teo, whose school has 3,200 foreign students.

Another pull is the phenomenon of landlords partitioning the living room of a condo to make way for more rooms in a unit – making rent more affordable for a student wishing to stay in a private estate, said property agents.

“A lot of owners have done it – it’s common knowledge in Singapore,” said property agent Clinton Poh.

Rents in such condos range from around $500 to $600, and are cheaper than an unaltered HDB room in the same area which goes for $700 a month, said another property agent, who declined to be named.

Such housing also caters to S-Pass holders who prefer their privacy albeit in a smaller room, rather than squeeze in with a roommate, said Mr Poh. Such housing can usually be found around Geylang and Balestier, which are also areas popular with students.

Source: Today, 18 June 2009

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