Residential Rental Market in 2010

Current Situation: Residential Rental Market in 2010

Singapore is still one of the 10 most expensive cities for expatriates to rent housing, according to the Mercer survey from February 2009. Comparing residential rents in 300 cities for expats, Mercer placed Singapore in tenth spot, it ranked ninth in September 2008.

According to Urban Redevelopment Authority, the pace of rental decline moderated from 5.2% qoq decline in 2Q 2009, to 2.2% qoq decline in 3Q 2009. The fall was uniform across the three planning regions, with rents of non-landed properties in Core Central Region falling by 2.1%, while that in Rest of the Central Region and Outside Central Region each dropped by 2.3% qoq

The fall in rents of non-landed private residential properties in 3Q 2009 suggested that the marginal increase in 2Q 2009 was seasonal, as leasing activity improved on the back of expatriates locking in leases before the summer holidays.


However, with such a marginal decline in 3Q 2009, it suggested that rents of non-landed residential properties are increasing stable. The marginal declines also reflect an easing in the pace of rental decline, as overall private residential sentiments remain positive. Rate of rental decline for detached homes island wide was slower at –2.7% in 3Q 2009 compared to 4.3% in 2Q 2009.



Outlook

The rental market can hope to benefit when the integrated resorts are completed, as there may be a number of senior management and foreign gaming experts and professionals who will be seconded to Singapore for strategic management of the IRs.

Rents of private residential properties are expected to increase by about 5% for the whole of 2010, but this will be property specific. There may be a number of well-positioned developments and quality completions, which have opportunities to achieve rental growth exceeding 5%.

The Good Class Bungalows where supply is lean will attract senior expatriates who remain for strategic portfolio and who are still willing to pay a rental premiums. As such, rents of GCBs may be able to increase by an average of 15% in 2010.

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Veron Leo
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PROPNEX REALTY PTE LTD
veron.leo82@gmail.com
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