Rental decline easing and rates will stabilise or rise next year, say analysts
Property investors worried about collecting less and less rental income may soon have cause to cheer, as property consultants expect rents to remain steady or even start rising from next year, albeit slightly and slowly.
The worst seems to be over, though the new condo completions coming up will keep rents from rising quickly or significantly, they say.
In the first nine months of the year, the Urban Redevelopment Authority’s rental index fell by 15.2 per cent, reversing the 2 per cent positive growth last year. However, the pace of decline has slowed. The rental index saw a milder correction of 2.2 per cent in the third quarter, compared with declines of 8.5 per cent and 5.2 per cent in the first quarter and second quarter, respectively.
Property consultants say private home rents are stabilising, and that the high-end segment has stabilised.
Said Cushman & Wakefield managing director Donald Han: ‘High-end private home rents have bottomed and should be on the way up, while the mass and mid-tier rental markets are in the process of bottoming.’
Already, rents of some good class bungalows have risen by about 5 per cent in the past three to four months, he disclosed.
The positive sentiment would eventually seep into the market for high-end apartments, he said. ‘Some companies are starting to look at expansion again, so that’s good news.’
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