In light of the recent events, the number of sales for HDB flats and private apartments may have reached its bottom in June during the period of the circuit breaker but, rents continued to go down further. This data has been put forward by market observers as a rejoinder to the flash data revealed by Singapore property portal SRX Property.
According to the report, the total volume of private residential properties that belong to the non-landed category handed out on lease witnessed a proliferation of 1%; that is, its numbers escalated from 2,853 units in April to 2,881 units in May. Coming to the rental volume of the private flats in concern, it was still 45.7% lesser than what it was a year ago and 38.8% lower when compared to the five-year average volume for the same month.
As far as the HDB rental market is concerned, the number of leased flats tumbled by 4.2% to 1,147 in May from 1,197 in April. When contrasted against the figures of 2019, the rental volumes for HDB flats fell by approximately 45.1% this year and dropped by 42% corresponding to the 5-year average volume for the month of May.
Out of all the homes that were leased in May 2020, 5.5% were executive flats, 25.8% were five-room units, 33.5% were 3-room flats and the majority that constituted to 35.3% were four-room flats. Nicholas Mark, the ERA Realty head of research and consultancy stated that the circuit breaker in April and May is the primary reason that made way for such low leasing numbers in both public housing and private residential rental markets.
He further added that the numbers that we have in front of us today are only because the transactions continued to take place although tenants were unable to survey the properties offered to them in person. The fact that tenants have a tendency of leasing properties simply by viewing their photos and videos on leasing websites as most of them sign contracts that last for one or two years maximum is another factor that played a crucial role in influencing the situation. Naturally, the stakes of renting a property without exploring it are far lesser than buying it under the same circumstances. If a tenant doesn’t like a property after relocating, he can move somewhere else or terminate the lease at once.
In the private rental market, the average rents of May dipped by 1.4% from April and this could be because landlords were looking forward to securing their pre-existing tenants in this ambiguous period, even if it required them to reduce the rentals. If viewed against the records of May 2019, the private rents were pretty much on the same level but, are down by 17.3% from the highest that it touched in January 2013.
As for the public housing rental market, SRX data has revealed that the rents plunged by 1.3% from April. On the year-on-year front, the rents of HDB declined by 0.8% and less by 15.6% from the time it reached the zenith in August 2013. If the predictions of Ms. Christine Sun, the head of research and consultancy of Orange Tee and Tie are to be believed, the prevailing conditions can improve once the travel exemptions are warded off and the economy gradually starts reopening.
Mr. Mak also affirmed that with the ongoing limitations on viewing properties, the leasing transaction volume in June will remain quite the same as April and May. It is only after these constraints are lifted that the rental volume will surge as some tenants will consider moving to other properties.
