Gone are the days when property owners and investors ruled the market as tenants today have the choice of being picky given the influx of new units, reported The Straits Times.
In the case of Celine Tan, her potential tenant wanted the unit to be fully furnished, have new bath towels and cutlery, a bigger TV set and free servicing of air-conditioners.
“It’s quite ridiculous. I never had this experience in the last 10 to 15 years of renting, but everyone in the market is so competitive… (that I) have to accede to most of their requests,” she said.
Although Tan did not provide new bath towels and cutlery, she gave in to the other demands, which included refurbishing the dining room and bedroom, with the tenants selecting the new furniture. “They took a picture at Ikea and showed me the model they wanted,” she added.
With that, she was able to rent her three-bedroom apartment at Robertson 100 in Robertson Quay last year for $4,600 per month, down from $5,200 previously.
Aside from lower rents, tenants are also demanding shorter leases of six months to one year, noted PropNex agent Anthea Yeo. “Rental is coming down; nobody wants to commit to two years because they know next year, it could be cheaper.”
She revealed that the lacklustre market also saw her income drop by $200,000 in 2015 from the year before.
According to data from the Urban Redevelopment Authority (URA), private residential rents dropped by 4.6 percent last year. The suburbs registered the biggest decline, with rents falling 5.6 percent, followed by the city fringe and city area at 4.9 percent and 3.8 percent respectively.
Analysts expect rents to continue sliding this year amid the weaker economy, tight immigration policies and a flood of 26,467 new private homes and executive condominiums.
In fact, rents may fall by more than eight percent this year, said Century 21 Singapore Chief Executive Ku Swee Yong. Private home rents in suburban areas are expected to face more pressure as the bulk of new homes are found there.
Cushman & Wakefield Research Head Christine Li expects the vacancy rate for private homes to increase from 8.1 percent in Q4 2015 to a “critical point” of nine to 10 percent this year.
“At that level, it shows that the market is correcting in a big way, and owners may be a bit jittery, so they may rush to offload their units,” noted Li.