Private home rental prices seem to have finally stabilised after 15 quarters of decline. After a 0.2% fall in private home rents in Q2, prices stabilised in Q3.
Landed home leases boosted rental segment
Surprisingly, landed home rents were what bolstered the rental market with a 0.6% rise. Non-landed private property prices had fallen 0.1% in the third quarter.
Prices of apartments in the rest of the central region rose 0.9% last quarter after a 0.4% fall in Q2. In the core central and outside of central regions however, rents fell 0.8% and 0.3% respectively.
Rental market may soften as non-resident numbers fall
Vacancy rates for private homes have risen island-wide as more completed homes enter the market. Property analysts have reported seeing more property owners taking their units off the rental market as potential growth seemed to be in the home sales segment for the moment. This may have reduced the number of options tenants have for units and the competition for choice units, hence raising home rents.
One of the other concerns for the real estate market is the decreasing number of non-residents such as foreign workers and students. The non-resident population has fallen for the first time in 14 years. Immigration policies have changed in the past few years and coupled with the insurgence of new apartments, the outlook for the rental market will fluctuate accordingly.
Considering the number of collective sale deals sealed this year, will the cycle repeat itself in 5 to 10 years’ time?