RISING RENTAL PRICES
The Government unveiled a tranche of property cooling measures in September, including a 15-month waiting period for private home owners who wish to buy resale public flats.
According to a report by OrangeTee and Tie, HDB rents have risen substantially in recent months as many landlords have increased rents in anticipation of more interest rate hikes.
“Currently, many landlords are still able to cope with the rising interest rates as they have passed on the additional costs to their tenants,” said the report.
“With higher property taxes and possibly higher costs of living next year, we may expect landlords to raise rents further.”
The 15-month waiting period for private home owners to buy resale flats may also lead to more people renting in the interim, and the increased demand will drive rental prices higher in 2023, added the report.
Huttons Asia’s senior director for research Lee Sze Teck said last month that the return of foreign students and sustained hiring of expatriates are pushing up demand for private homes in the third quarter of this year.
“There has been some ‘musical chairs’ movement of tenants as the rising rents have exceeded their budget and displaced some of them,” he added.
Ms Christine Sun, senior vice president of research and analytics at OrangeTee and Tie said there may not be a quick respite from surging rents.
“With more tenants signing longer lease tenures, we may expect the rental volume to fall further as fewer transactions will be recorded over time. The longer lease periods will also lead to fewer homes available for rental.
“Private home owners buying unsubsidised HDB resale flats and are affected by the 15-month wait-out period will rent in the interim, thus intensifying rental demand.
“However, more homes may be completed next year, which may slow down the pace of rental price growth from mid-2023.”
Source: Channel News Asia
