Private rentals inch upwards
Turnaround comes after 5 quarters of decline
Weekend Today
Saturday, 23 January 2010
Rentals of private residential properties inched 0.6% higher in the 4th quarter of last year, reversing 5 straight quarters of decline. This was a turnaround compared to a decrease of 2.2% posted in the third quarter of last year.
The uptick in rentals was supported by the take-up rate which outstrips supply last year, said Colliers International’s research and advisory director, Ms Tay Huey Ying.
“While the
net increase in the stock of private homes hit a 5-year high of 8,285 units in 2009,
demand for physically completed homes hit a 9-year hïgh
, to record at 10,520 units,” she said.
This pushed
occupancy rate to an all-time hïgh of 95%
by end-2009, from 93.9% in end-2008,” she added.
The
improving economy has a part to play as well.
“The leasing market also leveraged on the improving economic fundamentals in 2H2009 and began to stabilise,” said CBRE Research executive director Li Hiaw Ho.
By regions, rental of non-landed properties in the prime areas known as the Core Central Region (
CCR) and the city fringe areas or Rest of Central Region (
RCR) increased by
0.9% and
0.1% respectively in the 4th quarter.
Meanwhile, rental rates for properties in other areas or those known as Outside Central Region (OCR) remained unchanged.
Overall rentals have fallen 14.6% for the whole of last year but were
back at mid-2007 levels by Q4, added Mr Li.
Colliers’ Ms Tay expect rents to rise by 5 to 10% this year.
“The number of expatriates is expected to rise in 2010 given the improving business climate and confidence that will lead more firms to consider re-activating hiring plans,” she added.
She expects high-end homes in the
CCR, traditionally more popular with expatriates, to experience faster rental
growth of 8% to 12%. The mid-tier segment in the
RCR is expected to see rental upside of
5% to 8%, while mass-market homes could see rental movements of up to 3%, she added.
Meanwhile, Urban Redevelopment Authority’s final price index showed a growth of 7.4% quarter-on-quarter growth for private homes in Q4, slightly higher than the flash estimate of 7.3%.
Sub-sales clocked 599 units in the 4th quarter — down from 1,342 homes in the previous quarter. In percentage terms however, subsales accounted for 10.3% of all sale transactions in Q4, comparable to the 10.6% in Q3.
Analysts expect private property prices to moderate this year in the light of government’s stance that it would intervene with more measures should the property price growth runs ahead of the economy. Contrary to last year’s bull run in the mass market segment, high-end and luxury properties are expected to lead the market.