The full article can be found in The Business Times, Real Estate Section, Page 17, 14 June 2018.
Rents for both private and HDB residential properties increase 0.2 per cent in May from the previous months as rental volumes continue to decline. Overall, rents for HDB residential properties were down 2.7 per cent compared to May last year, and 15.3 per cent lower than its peak in August 2013.
Rental volumes of private and HDB properties decreased 3.2 per cent and 12 per cent respectively in May from April, and 5.2 per cent and 1.6 per cent respectively as compared to May last year.
In the HDB segment, rents for three-room flats and executive flats decreased by 0.4 per cent and 0.7 per cent respectively from the previous month, while four-rooms and five-rooms increased by 1.1 per cent and 0.2 per cent respectively.
ZACD Executive Director and Chief Investment Officer, Nicholas Mak, said this could be due to more Build-To-Order (BTO) flats reaching their five-year minimum occupation period (MOP), which makes their owners eligible to sub-let.
He added, “A significant supply of BTO flats were offered for sale between 2010 and 2013. The new flats which have reached their five-year MOP can now be offered up for rent, therefore increasing the supply of rental flats in the market.”
As the local employment market improves and the demand for foreign talent rises, Nicholas Mak predicted that a gradual and gentle upwards trend in the private rental index can be expected for the rest of the year. This could spill over to the HDB leasing market and perhaps cause the HDB rental index to bottom this year.
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