Singapore Private Rental Prices Jump at Fastest Pace in 15 Years
Rental prices for private housing in Singapore shot up by nearly 30 per cent last year, the biggest jump since 2007, which was the year a heady run-up in United States' housing prices collapsed and set off the global financial crisis. Analysts expect rents for private housing to rise, though by not as much, this year. They said that various factors caused the jump in rents here last year, including some delays in the completion of private housing projects. Other reasons included increased demand for private rentals as a result of both the return of foreign students looking for somewhere to live and measures taken by the Government to cool the public housing market. The Government announced last September that private property owners must serve a wait-out period of 15 months after selling their homes before they are allowed to buy a non-subsidised resale Housing and Development Board (HDB) flat. Some exceptions apply. The aim was to put a brake on rising HDB resale prices, but property experts have told it has had the secondary effect of driving up demand for private rentals as affected private home sellers look to lease a place for the 15 months. Before the announcement, both current and former private property owners were allowed to buy a non-subsidised HDB resale flat on the open market, with the requirement that they dispose of their private properties within six months of the HDB flat purchase. The 29.7 per cent increase in private property rental prices over 2022 was reported in data released by the Urban Development Authority (URA) followed a 9.9 per cent rise in 2021, already quite a substantial jump. The biggest increase in rents in Singapore before 2022 was in 2007, when rents skyrocketed 41.2 per cent. Many of the projects set for completion are located outside the core central region designated by URA, where homes are usually bought to live in and not for investment purposes. Therefore, there may not be many new homes for rent, he said. In the core central region, which includes areas such as City Hall and Sentosa, private homes are more likely to be leased to tenants. New projects tend to command higher rents than older projects. Rents for HDB appear to have posted a steady, less dramatic increase in 2022. HDB did not provide an overall figure for rent increases of flats for last year. However, one of the biggest jumps was in Queenstown where the median rent for a five-room HDB flat there rose by 17 per cent from S$3,600 in the third quarter of 2022 to S$4,200 in the last quarter. This is compared to S$3,200 for the same flat in the second quarter and S$3,010 in the first quarter. Despite rising rents, the volume of HDB flats that were leased plummeted. For the whole of 2022, 36,166 units were leased, 15.1 per cent fewer than the 42,623 units in 2021. It is also below the 38,798 units leased in 2020. Prices of private residential properties also increased — by 8.6 per cent for the whole of 2022, slightly lower than the 10.6 per cent increase in 2021. Private residential property prices rose by just 0.4 per cent in the last quarter of 2022 compared with the third quarter, well down from the 3.8 per cent quarter-on-quarter rise in the third quarter.
Tags : rental prices private housing Singapore global financial crisis Government