Rents for Singapore condos increased in Q2

Rents for condos increased across all segments in the second quarter in Singapore

A seasonal increase in leasing activity in April and May has led to a strong increase in rents for non-landed homes across all segments in the second quarter of 2012, according to DTZ Research.

The property firm said this is due to expatriates relocating to Singapore after the summer holidays, who tend to confirm their rental contracts during the April to May period.

Rents for suburban condominiums increased the most by 1.9 per cent quarter-on-quarter in the quarter, after increasing 0.6 per cent in the first quarter.

Similarly, rents of prime condominiums increased but by a smaller 1.5 per cent, following a period of no growth in the first quarter.

“Despite global economic uncertainties which have affected expatriate relocations, rents of luxury condominiums edged upwards in the second quarter, supported by rental demand from top-end expatriates who still have the budgets to rent luxury apartments even if there are now fewer of them relocating to Singapore. On the other hand, cost-conscious mid-tier foreign professionals who do not enjoy housing allowances as part of their relocation package continue to support rental demand for apartments in the range of S$3,000 (US$2,370) to S$7,000 (US$5,530) per month,” said Margaret Thean, DTZ’s executive director for residential.

Resale prices of landed homes registered increase
On the sales front, DTZ said resale prices of landed homes gathered pace in the quarter as buying sentiment returned.

In fact, this segment experienced the biggest increase in prices, especially those in the suburbs.
Resale prices of leasehold terrace homes and freehold landed homes in the suburbs rose 2.0 per cent quarter-on-quarter and 1.2 per cent quarter-on-quarter respectively.

This is more than the 1.0 per cent increase recorded in the prime districts of 9, 10 and 11.

In the condominium market, DTZ said more buyers were diverted to buy resale properties in search of better value as new condominium launches in the suburbs had set a new benchmark in prices.

As a result, resale prices of freehold condominiums in the prime districts of 9, 10 and 11 registered a quarter-on-quarter increase of 0.5 per cent in the second quarter, reversing the fall of 0.7 per cent in the previous quarter.

Likewise, resale prices of suburban leasehold condominiums rose, increasing at a faster pace of 0.6 per cent in the second quarter compared to the 0.3 per cent experienced in the first quarter.

Meanwhile, in the luxury sector, resale prices of condominiums registered a smaller fall of 0.5 per cent quarter-on-quarter in the second quarter.

In the first quarter, luxury condos declined 0.8 per cent.

DTZ said buyers appeared to have taken the December 2011 Additional Buyer’s Stamp Duty (ABSD) measures in their stride and are slowly returning to the market.

Moving forward, DTZ expects demand to remain healthy due to the low interest rate and buoyant employment market.

“However, the strong pipeline of developments will intensify competition for purchasers and tenants, and limit price increases particularly in the face of slower economic growth,” said Chua Chor Hoon, DTZ’s head of Asia Pacific research.

Source: PropertyReport – 2012 Jul 5

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