Singapore rental market is mostly driven by foreigners since most of the Singaporeans have their own flats and do not rent. This is especially true for the private property rentals. In private property, there is hardly any Singaporean in rental so this segment is almost completely dependent on foreigners and Singapore Permanent Residents.
According to property guru, asking rental prices are falling as a growing number of senior executives from the expatriate community leaving Singapore:
[1] - Expatriate packages are shrinking as a part of cost cutting measures. Housing allowances par of these expatriate packages are one of the major drivers of Singapore’s rental market, especially in the luxury segment. Since last year both number of expats who earn enough to rent a private property and the number of expats on housing allowance is declining.
[2] - Hiring, especially hiring of foreigners is slowing down due to economic uncertainty and strict immigration policies implemented by the government last year.
[3] - And there is a flood of private property, bought for investment, is entering the rental market 2012 onward.
[1] - Loss of foreign talent affecting private property rentals
According to property guru, asking rental prices are falling as a growing number of senior executives from the expatriate community leaving Singapore:
"Based on data compiled by The PropertyGuru, the most notable fall in median asking rental prices was seen in District 4 (Harbourfront / Telok Blangah), recording a significant 15 percent decline from a median price of S$7,900 in Q4 2011 to a median price of S$6,700 in Q1 2012. Coming in second is District 19 (Hougang / Punggol / Sengkang), which saw a 13 percent fall from a median price of S$4,000 at the end of last year to a median price of S$3,500 in Q1 2012.
In addition, asking rental prices in Districts 2 (Chinatown / Tanjong Pagar) and 18 (Pasir Ris / Tampines) both declined by eight percent while Districts 22 (Boon Lay / Jurong / Tuas) and 25 (Admiralty / Woodlands) were down seven and six percent respectively.
While the data is solely based on asking rental prices (PropertyGuru does not track actual transacted prices), the subdued expectations regarding rentals is an indication that global economic concerns are taking their toll on the market. According to a source, companies are either hesitant to hire or are holding back on employment packages for their existing foreign staff. "[1]There are mainly 3 winds blowing against rental price rice:
[1] - Expatriate packages are shrinking as a part of cost cutting measures. Housing allowances par of these expatriate packages are one of the major drivers of Singapore’s rental market, especially in the luxury segment. Since last year both number of expats who earn enough to rent a private property and the number of expats on housing allowance is declining.
[2] - Hiring, especially hiring of foreigners is slowing down due to economic uncertainty and strict immigration policies implemented by the government last year.
[3] - And there is a flood of private property, bought for investment, is entering the rental market 2012 onward.
Moving forward, Sherman predicts that if expats continue to lose their jobs and are repatriated back home, “the rental market will be negatively impacted”.
“The same goes for the decline in the numbers of expatriates being sent on assignment to Singapore,” she added.[1]
[1] - Loss of foreign talent affecting private property rentals
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