Private condominium rentals continued to be hammered last month as weak leasing demand and a mounting supply of new apartments weighed on the market.
Rents of non-landed private apartments slid for the 11th month in a row, falling 0.8 per cent in December last year compared with the preceding month, SRX Property's flash estimates showed yesterday.
Compared with December 2013, rents were down 5.3 per cent last month, said SRX, which compiles its property price index with data from property agencies.
Rents have been falling since last February and have declined 10.1 per cent since their peak in January 2013.
Fewer leases were inked last month as well, with an estimated 2,968 units let out - down a slight 2 per cent from 3,026 in November. However, 14.1 per cent more leases were signed last month compared with the 2,601 units rented the same period a year earlier.
Apartments in prime central areas dragged overall rents down with the steepest drop at 1.2 per cent, compared with a 0.4 per cent slip in November, while those in the city-fringe areas fell by 0.6 per cent over a 1.1 per cent drop for the same period.
Suburban units held up better with a 0.3 per cent dip, after easing 0.9 per cent in November.
Ms Christine Li, research head at OrangeTee, said a sizeable number of shoebox units launched in 2010 are now being completed in city-fringe and central areas, while luxury units are facing high vacancy levels.
Of the 12,097 shoebox units sold since 2009, about 47 per cent were in city fringe areas and around 37 per cent in the suburbs.
"In the city centre, supply is abundant but demand is not as high as before because expatriates are not getting enough housing budgets," said Ms Li.
Demand for homes with rents in excess of $10,000 is "really bad", she said, such that the gap between rents in the city centre and city fringe is slowly narrowing.
But a looming supply glut is set to hit the suburbs this year, with more than half an estimated 25,000 new homes expected to be completed in the suburbs by the end of the year.
Owners at projects such as Parc Rosewood in Woodlands and Eight Courtyards in Yishun have recently been given the keys to their new homes, for instance.
"Owners of newly completed condominiums are expected to cut rents significantly to attract tenants, so there will be some flight to quality, (especially) within the same locality, said Mr Ong Kah Seng, director of R'ST Research.
"As there will be even more substantial private residential properties completed in 2015, it is expected that non-landed private residential rents will fall by up to 8 per cent for the whole of 2015."
This article was first published on January 15, 2015.
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Saturday, Jan 17, 2015
The Straits Times
Source: AsiaOne (17 Jan 2015)