While HDB rental rates inched up ever so slightly in May, private home rents have gone in the opposite direction and fallen 0.8 per cent in May. Compared to the same month last year, rental prices have fallen 3.9 per cent.
In the private home sector, prime district rents fell the hardest at 1.8 per cent while rental prices of units in the city fringes and suburbs fell 0.5 and 0.4 per cent respectively. The number of leases closed last month did however increase by 12.5 per cent from April with 4,650 condominium units rented out in May compared to the 4,134 in April.
HDB rents have risen 0.7 per cent though property analysts are taking it to be a temporary adjustment which is unlikely to be sustainable as the rental market may remain weak through the months ahead. HDB rents are expected to fall 4 to 5 per cent this year while private property rentals are expected to fall 8 to 10 per cent as more units are left vacant and competition for a limited tenant pool applies downward pressure on the market. The entry of new condominium units into the burgeoning market has not aided matters as well and expatriates’ housing budgets have also shrunk, leading to weaker demand in particular for high-end luxury housing.
Much of the future of the real estate sector is dependent on the job market as well. Should the job market take a turn for the better, the number of tenants looking for units nearer their workplace, in the Central Business District or regional commercial hubs, may also then increase.