Published July 18, 2006

Home leasing deals rise 15.8%
Increased demand from relocating expats, prime districts most popular


THE number of residential leasing transactions increased to 8,807 over the first three months of this year. This represents a 15.8 per cent increase compared to the same period last year when the number of transactions was 7,599.

And according to Savills Singapore senior manager Wallace Chu, there have been 3,284 leases registered in April and May so far. 'These are just the preliminary numbers and I am confident the final figure for Q2 could top the previous quarter,' he said.

Mr Chu said that Districts 9, 10, 11, 15, 16 and 21 are the most popular residential districts among lessees. An analysis based on the latest full-year figures in 2005 by Savills revealed that District 10 registered the most leases - 17 per cent or 5,887 out of a total of 33,874.

District 15 - which includes Katong, Joo Chiat and Amber Road - came in second with 3,872 transactions, beating District 9's 3,474 leases. Mr Chu said one explanation for District 15's popularity could be the sheer number of developments there.

The most expensive homes for rent are in District 10 with developments like Ardmore Park, Spring Grove and The Wilby Residence fetching average rents of $48.64 psm pm, $32.17 psm pm and $34.12 psm pm (as of Q1 2006) respectively.

The Bayshore, costing $17.24 psm pm in District 16, had the most number of units leased - 75 units. Valley Park ($26.99 psm pm) in District 10 had 71 units leased and Aspen Heights ($30.08 psm pm) in District 9 had 66 units leased.

Rents also depend on the age of the development, and Mr Chu noted that the rental gap for developments less than five years old and those older than five years has ranged between 33-38 per cent for the last seven quarters.

Mr Chu said that the increase in leasing activity is due in part to the number of expatriates in Asian countries like Hong Kong and Japan relocating to Singapore. 'They come from sectors like banking and R&D,' he said. Based on Savills' own data, Mr Chu said that these expatriates are senior executives with housing allowances of at least $15,000 per month.

With increased housing allowances, Mr Chu said that expatriates are looking for larger apartments and landed property.

He said that the volume for detached and terrace houses was 20 per cent more in the first quarter of this year than in the first quarter of 2005. He added that apart from the prime districts, landed property in Districts 15 and 16 were also popular with expatriates.

Those keen on buying property as an investment will be interested to know that gross rental yields are on par with Hong Kong at between 3.5-4.5 per cent. Those with a higher appetite for risk may want to consider China; Mr Chu said yields in Shanghai are 7-8 per cent.