The residential leasing market is gradually turning to favour tenants, even as there is likely to be strong demand over the next half a year.
The rental market was buoyant in the third quarter of the year. There were 15,083 rental transactions - a record number and an 11.6 per cent increase from the previous quarter.
This was attributed to factors such as the 5.1 per cent growth in GDP for Singapore year-on-year, lower unemployment rates, and foreign nationals bringing forward plans to relocate here in light of the Fair Consideration Framework (FCF) which will take effect next August.
The FCF will require every company with more than 25 employees to advertise job openings on a new government-sponsored job bank before applying for a new Employment Pass (EP).
While the framework applies to jobs with monthly salaries below $12,000, "it is foreseen that from the start of next year, the number of overseas nationals in Singapore will decline further, as EP holders will soon face more difficulties in getting approvals on both fresh and renewed applications”.
These factors come against a backdrop of higher vacancy rates and slower rental growths.
In Q3, 6.1 per cent of private homes, or 17,459 units, were vacant, up from 5.6 per cent in Q2. This came on the back of several big projects such as the 1,040-unit The Interlace on Depot Road, the 429-unit Tree House on Chestnut Avenue and the 302-unit Cape Royale at Sentosa Island getting their temporary occupation permit.
As for rents, the overall index for private residential properties from the Urban Redevelopment Authority showed a 0.2 per cent growth in Q3, down from 0.3 per cent in Q2. The average monthly rent of high-end condominiums tracked by Savills was flat at $4.86 per square foot.
Source: Business Times – 26 November 2013
