Market largely unaffected by subletting caps

Six months after the start of quotas on subletting public flats to foreigners, the fear that they would hurt the rental market does not seem to have come true.

As of June, only about 1 per cent of Housing Board neighbourhoods and blocks have reached the quota limits, the HDB told The Straits Times.

This is about the same proportion initially affected when the quota kicked in this January.

Since then, only 8 per cent of the flats in a neighbourhood or 11 per cent of the flats in a block can be wholly sublet to permanent residents or foreigners. This does not apply to subletting of rooms.

HDB said the measure “is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland”.

Malaysians, however, are exempt from this restriction because of their cultural similarities.

Agents said the overall rental market has been cool, but is largely unaffected by the change.

More than 46,000 HDB flats have approval to be rented out wholly.

HDB rental prices fell from August, edging up in February and March but sliding thereafter. The median monthly rent for HDB flats was $2,300 last month.

“(The change) hasn’t really affected things much,” said Prop-Nex agent Calvin Ng, who has rented out several flats in the west since then. “So far, the cases I’ve handled are still within the quota.”

Dennis Wee Realty agent Aaron Lin said the bigger challenges in the rental market are the stricter foreign labour policy and excess supply of flats for rent.

He has come up against the quota only near MRT stations in the west, such as Clementi.

Property agents who focus on such plum areas – near MRT stations in the western part of Singapore – such as Dennis Wee Realty agent Jimmy Chua, have been hit. “Most of the blocks that are more popular near the MRT are affected,” he said.

He added that many flat-hunters are foreign students or fresh graduates from the nearby universities, some of whom had to settle for “second-choice” units.

Century21 chief executive officer Ku Swee Yong expects the quotas to bite in Jurong East, where two hospitals – with more than 4,000 health-care workers – will be completed in the next 12 months.

SLP Realty agent Jordan Lim, who specialises in renting, has shifted his focus away from Clementi as a result of the change.

The quotas are not an issue in areas such as the east, he said.

But landlords such as Mr James Tan, who is in his 40s, do not have that option. Since February, his flat in West Coast Road has been subject to the quota and can be sublet only to Singaporeans or Malaysians. But no such prospective tenants have contacted him.

“I’m totally unable to rent out my flat. I just have to wait and check every month,” he said.

The quota information, available on the HDB’s website, is updated on the first of every month and is valid for the whole month.

Source : ST Property


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