The month of September 2018 brought about a decrease in the rents of Condos by 0.4% and HDB by 0.5%*. Now into the third month after the cooling measures were implemented, the alarming question is: Are these measures leading to a sluggish rental market in Singapore?
In the same time period, Condo rentals in Singapore were down by -0.4% with OCR posting a decline by -0.7% and CCR by -0.5%.
While the HDB rent were down by -0.5% after posting an increase last month. It is mainly the 3 room flats, that are driving the decline while the spacious 5 room flats have registered a slight increase in rent.
According to the Labour Market Developments statement by Ministry of Manpower, foreign employment (excluding Foreign Domestic Workers) grew slightly by 400 in 1H 2018 but Employment Pass (EP) holders fell (-3,400) due to the rise in the EP qualifying salary.
This has definitely impacted the overall demand for rental properties in Singapore.
But, is this indicative of further lowering of rent in the near future?
Home buying amongst expatriates has slumped as the additional buyer’s stamp duty on home purchases by foreigners has increased. Hence expats will search for properties on rent in Singapore.
We at TRUUUE Tenant (also known as TRUrental Tenant) reckon, in the forthcoming months, foreign buyers may switch from buying a home to renting one, bringing some stability to the slumping market.
The Ministry of Trade and Industry (MTI) has maintained the 2018 growth forecast for the Singapore economy at 2.5 – 3.5% and MOM expects labour demand to pick up in H2 2018, in line with seasonal hiring as seen in previous years.
MOM also predicts that the foreign workforce growth will continue to be moderate.
Heavy on Supply-side – Are there really more rental unit choices in the market?
Yes, the supply of rental properties seems to be increasing as homeowners want to avoid selling at lower prices but would rather monetize through rental income. This has resulted in more properties up for rent and has increased the competition in the market.
It will be interesting to watch how the coming months unfold on the property rent in Singapore.
* Source: SRX Flash Data