The lease for private residences has grown weaker during the past year in different districts of Singapore and this has greatly affected the rentals in suburban areas that are quite unpopular. Unfortunately, the current market situation does not promise any improvement soon as rental rate went down to another 1.1% during the 2nd Quarter.
Compared with the performance of last year’s 2nd Quarter while loan restrictions were not yet implemented, the current years Q2 performance- only 7 districts remain strong which include the Ang Mo Kio and Bishan (D20) which observed a 15.9% increase in rental rates. Moreover, an increase in transaction was also observed in this district with Ang Mo Kio enjoying a 138% increase from Q2 last years to Q2 of the current year.
Unfortunately, District 27 suffered a 10.6 % decline in rent which is believed to be the worst. District 11 which includes Watten Estate, Thomson and Novena remained as is as well as District 7 and District 12. On the other hand, 3 other districts are listed to have experienced a single-digit increase.
Projects located in mature estate enjoy higher rates due to their accessibility to functional amenities like public transportation. This became their advantage over newly-developed housing areas. This could also be the reason why rentals in places like Ang Mo Kio and Bishan enjoy rental increase. Other reasons could be the redevelopment in Bishan Park or the newly completed Centro Residences during the 1st Quarter.
The investor-friendly spaces available at Centro Residences with higher prices could also influence the rent. Q1 and Q2 of the year showed that 107 rental transactions took place in the project.
On the other hand, the number of projects being completed over the same period of time could result to a tighter competition among tenants. Sembawang and Yishun both suffered this scenario since at least 1,000 units have been completed from 2013 to the first half of 2014. Good thing for District 20 though as no other residential projects were completed during the 2013’s and 2014’s 2nd Quarter except Centro Residences.
Currently, it is projected rents in the coming months will remain depressing due to the slow inflow of foreigners in the country and the growing number of projects being completed. Data shows that between the last part of 2014 till 2015, nearly 30,000 units are bound to be finished and about 56% of which is located in the suburb.