Private home rentals seen remaining stable

Private property rentals are likely to remain stable as the latest property cooling measures take effect, analysts have said.

The pool of potential buyers may be shrunken by measures such as a greater minimum upfront cash required from second-time and subsequent home buyers, a higher additional buyer's stamp duty and tighter loan-to-value (LTV) limits on individuals with one or more outstanding housing loans.

The residential sector curbs may benefit the rental market, as those who are priced out or who withhold their buying decisions, particularly the permanent residents, would probably turn to the leasing market instead.

Trading volumes should be healthy, given the demand, analysts said.

Eugene Lim, key executive officer at ERA Realty, expects the market for units with rents at or below $6,000 a month to be more active.

Rentals for private non-landed homes in the fourth quarter of 2012 had slipped one per cent from the previous quarter, data from the Singapore Real Estate Exchange showed on Friday.

Market watchers said other factors may apply downward pressure on prices and rents over the next two to three years, such as a cautious economic outlook and a strong pipeline of projects near completion.

ERA's Mr Lim said the latest round of property measures has made sellers and buyers more realistic. All parties are more willing to negotiate now and this will translate itself to the rental market; landlords may accept lower bids than they used to demand.

ERA's Mr Lim, referring to the measure that now bars PRs from subletting the entire flat they own, said this will keep supply constrained, and may inevitably push rentals upwards.

Source: Business Times –15 January 2013