With a record completion of over 21,000 new homes launched in 2016 and riding on the back of a sluggish economy, which in turn has led to repatriations, the downward pressure on rents continues with tenants being spoilt for choice.
With the number of vacant units, currently estimated to be 10% of the market, competition between Singapore landlords and tenants has intensified. A reduction in expatriates and housing allowances has compounded yields and continues to thwart the market.
The demographics of arriving “new” expatriates has also changed and shows a shift from family units to single or couples without children. This has shifted the rental focus from landed homes for rent to smaller and cheaper condo’s for rent. Preference is trending for newer unit’s vs older un-renovated units. Landed properties are performing poorly.
Competition between landlords will further intensify as new projects come on stream. A strong possibility of a shift to higher interest rates in 2017 will further pressure yields and occupancy levels as landlords seek to attract tenants to ensure loan facilities are serviced.
The ongoing lacklustre market performance is not all bad news. New initiatives by disruptive companies such as RENTALS.SG, offer an absurdly simple premise: To connect landlords and tenants directly with potential savings of thousands of dollars in transaction fees.
By offering members an easy online solution with free photography, downloadable letters of intent, lease agreements and links for online filing, landlords now have all of the tools that they need to easily transact their residential or commercial property for rent and at a fraction of the commission fees charged by real estate agents.