http://www.straitstimes.com/archive/...d-bag-20121103
Rents of private flats a mixed bag
Factors include sizes of units, age of project and amenities on offer
Published on Nov 03, 2012
By Esther Teo Property Reporter
RENTS for private apartments have been varied this year, with sharp rises in places like Geylang and Eunos but dips in Macpherson and Braddell.
The variations, strikingly wide in places, could be due to several factors, including the size and quality of the apartments and what amenities are on offer.
Landlords with flats in District 14 - which include Geylang, Eunos, Paya Lebar and Kembangan - topped the table with per sq ft (psf) rents rocketing 22 per cent in the first nine months of this year, according to the Singapore Real Estate Exchange (SRX).
This means average rents rose from $3.03 psf a month to $3.71 psf in the period.
The SRX collates transactions by major property agencies, which account for more than 80 per cent of the private rental market.
Rental gains of more than 10 per cent were recorded in District 3, which includes Queenstown and Tiong Bahru; District 12, consisting of Balestier, Toa Payoh and Serangoon; and District 20, where Bishan and Ang Mo Kio are found.
It was a different story in District 13, which includes Macpherson, Braddell and Potong Pasir, where rents slid by 6 per cent to $3.34 psf a month.
Average rents were down 4 per cent to $5.17 psf a month in District 2, which covers areas such as Anson Road, Shenton Way, Raffles Place and Tanjong Pagar.
Ms Chua Chor Hoon, DTZ's head of Asia-Pacific research, noted that smaller units generally fetch higher rents on a psf basis. Tenants also pay more for newer projects.
"In Geylang, there were numerous small projects with small units that were completed this year. So that raises the average rent in the area," she added.
"In some areas, where there is already ample supply of units for rent, newly completed projects will create more competition for tenants, and that could explain the fall in rents."
On the whole, the SRX data points to rents rising, with areas near the central business district, where small units are available, registering a higher increase in rents, Ms Chua said.
Savills Singapore research head Alan Cheong noted some projects that have fared well this year.
A typical 1,500 sq ft three-bedroom unit at Rivergate at Robertson Quay, for instance, that was asking $7,500 a month a year ago now fetches $8,500.
A 2,000 sq ft three-bedder at Astrid Meadows in Coronation Road West was being rented for $7,500 a year ago but commands $8,500 today.
However, some projects, including BLVD in Cuscaden Walk, have floundered. Last year, for instance, a 2,000 sq ft three-bedroom unit at BLVD was being rented for $12,000 per month. However, due to noise from nearby construction activity, the asking rent is now $11,000, Mr Cheong noted.
But the leasing market remained red hot with a record 14,029 leases inked in the third quarter - 8 per cent higher than the third quarter of last year, which was also a record.
Median rents reached historic highs for both landed and non- landed homes in the three months to Sept 30.
Savills' Mr Cheong said rents might rise until June next year as more small-sized homes are leased and as more tenants share a unit to save money. "Nevertheless, these strong transaction numbers belie a weakness. Transactions have been rising due more to shuffling within the market, creating an increased velocity of transactions," he noted.
Pressure points include the apartments located at the lower stretch of Bukit Timah where new projects like Ferrell Residences are seeking tenants.
The completion of these new developments is intensifying competition for a limited pool of tenants, he added.
There is also an increasing supply of completed units in general, and rising vacancy rates and a downward pressure on rents are expected next year.
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