HDB rents rose a notch in May; rental value of condos depreciates further.


Last month, the local residential leasing market had mixed fortunes because rents for public housing flats rose a bit higher while the rental value of condominiums continued their fall.


According to flash estimates released yesterday, the rental value of private condos lost 0.8% between April and May 2017, and their value decreased by 3.9% since May 2016.

Rents declined the most in April in the choice areas by 1.8%, while the rent in the city fringes and the city suburbs lost 0.5% and 0.4% in their rental value respectively.


The number of leased condos rose from 4,134 (12.5%) in April to an estimated 4, 650 in May.


Many news outlets have reported that analysts hold the belief that the rental value of private properties may not return to normalcy soon. Also, the assumption is that the number of vacant properties could increase while rents could fall from 8% to 10% this year, too.


Challenges in the private leasing market such as an increase in new apartments in the property market and weak demand from foreign workers have the weakened the private condo rental market.

In recent years, a more uncertain employment forecast arising from softer business analysis has brought pressure on the rental value of properties.


Analysts also hold the belief that people will want to live closer to their workplaces in the CBD because of the expected surge in demand for the lease of homes when the employment market recovers.


A 19.7% decline in January 2013 represented an all-time low in the rental value of private condos.


However, from April to May of 2017, a 0.7% increase was recorded in favour of rents of the Housing Board flats, and that appears to be a minor deviation in the general trend. There was a 3.6% decline in the rental value of HDB flats in May 2016 compared to the trend this year. The belief is that there is likely to be a further 5% fall from the previous 4% of the rent of HDB properties.


However, in April 2017, nearly 1,872 apartments were leased, and that is approximately the same number (1,873) of HDB flats that were let in May 2017.


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