Tag Archives: Singapore Rental

Rents for Singapore condos increased in Q2

Posted on 7 Jul 2012 | Comments Off on 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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Rental yields stay frim in Apri

Posted on 12 May 2012 | Comments Off on Rental yields stay frim in Apri

Property owners who are worried that the return on their residential investment properties might have taken a tumble can afford to relax as rental yields held their ground last month.

This is mainly due to falling prices in the city centre and city fringe region and sustained rental demand.

Data from the Singapore Real Estate Exchange (SRX) found that overall yields for private non-landed homes was 4.06 per cent last month, easing slightly from the 4.23 per cent in the fourth quarter

SRX calculated the yield by dividing the average per square foot rent over 12 months by the average psf price of units sold last month.

Suburban homes posted the best yields of 4.02 per cent, city fringe homes pulled in 4 per cent while city centre homes had the lowest yields of just 3.24 per cent.

A total of 2,174 leases were inked in April by agencies under SRX, which collates and displays transactions by major property agencies, accounting for about 85 per cent of resale transactions in the market.

In a report by Straits Times, market analysts say yields are expected to hold at current levels in the short term. However, the sustained health of the rental market will depend on where the economy is headed, they add.

C&H Properties key executive officer Albert Lu said that the slight dip in rental yields last month does not indicate any sustained downward trend.

However he added that if the global economy should take a sharp turn for the worse, leading to foreign workers leaving Singapore, then rental demand and hence yields could be aversely affected.

Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group, thinks that yields in suburban areas could be compressed due to the upcoming supply of completed homes, even as home prices hold steady.

But, it is the opposite scenario in the city centre and city finge areas where yields may have risen as prices fall.

Recent data from the Urban Redevelopment Authority showed property prices falling 0.6 per cent for both the city centre and city fringe areas in the first quarter of the year.

Mr Tan Kok Keong, OrangeTee’s research and consultancy head, however, thinks that with the occupancy rate of suburban homes at more than 95 per cent, yields are likely to hold firm.

Rather, it is the yields of city centre homes that might be compressed as occupancy rates have been coming down in those areas, putting pressure on rents. This will, however, be a small drop since prices are also softening.

‘Rental yields will likely remain around this level. Until we see a larger scale expansion in the finance sector, it’s hard to see yields creeping up,’ he added.

Mr Tan said the rental market might face a challenging period from the second half of 2013 onwards when a bumper supply of public and private homes starts flooding the market.

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