The private residential property rental market seemed to have fared better in Q1 with a 1% increase in rents.
This is following a 1% fall in Q4 of 2018. In the HDB rental market, the number of approved rental applications rose by 2.6%.
Rental market may have started 2019 on good footing
Rental prices of non-landed private properties rose 1.1% in Q1, up from the 0.8% dip the quarter before.
In the landed property segment, rents rose 0.2%. While the increase may have been slight, it is still an improvement from the 2.1% decline in the last quarter of 2019.
In the HDB sector, 57,746 units were tenanted in the first 3 months of the year, with rental volume increasing 1.8%.
Market performance figures from the next 2 quarters may be the ones to watch as the second and third quarter are traditionally the peak rental seasons. Analysts are expecting rental volume to pick up, alongside sales volume and prices.
Vacancy rates of completed private properties (excluding executive condominiums) have fallen to a 5-year low of 6.3%. Non-landed private homes in the prime regions have fared particularly well. Rental prices of properties in these regions have risen 1.6% last quarter.
Growth in job market will have effect on property rental
Recent news about the expansion of the 2 integrated resorts in Singapore may mean a boost in job creation. Around one-third of the 5,000 new jobs which could potentially be created is likely to come from non-locals. This may, in turn, mean a larger foreign workforce which could give the rental market a significant boost.
As the rental market recovers, the resale market may also ride the wave as buyers become more aware of the potential yield a property could offer them. The number of completed homes is expected to be low until 2021, the rental market will be able to flourish for a while more.
The next peak of completed homes entering the market could be in 2022.