Jan 16, 2013

Singapore’s private rental market is expected to thrive in the aftermath of the property cooling measures introduced last Friday.

Experts predict that a large number of property hunters, especially permanent residents (PRs) and foreigners will shift towards renting rather than buying.

“Intuitively, we would expect them to turn to the rental market while they wait for property prices to soften.  With so much cooling measures in place, it is very likely that some consumers would think twice about buying a property right now,” said Getty Goh, Director of Ascendant Assets. 

At the same time, rental prices are unlikely to increase. Goh noted that there is sufficient supply of units to counter effect any hike in rental prices.

“To illustrate, based on Q2 2012 and Q3 2012 figures compiled by the URA (Urban Redevelopment Authority), we can tell that the number of occupied units went up from 256,835 to 259,469. However, the number of vacant units also increased from 16,115 to 16,877 for the same period of time.”

“During the coming months, more developments would also come online.  Hence buyers would be spoilt for choices and it will be unlikely that current owners would be able to ask for high rents,” he added.

Meanwhile, Eugene Lim, Key Executive Officer at ERA Realty said units with a monthly rent of S$6,000 or below will be more active.

34-year old systems engineer Henry Babu who is a PR told PropertyGuru that he is considering scrapping plans to purchase a home and will likely rent instead. He felt that the regulations make purchasing a home “very challenging for first-time PR buyers”.

“These recent cooling measures have brought on added expenses such as the 5% Additional Buyer’s Stamp Duty in addition to the existing Buyer’s Stamp Duty enforced on first-time buyers such as myself. We also have to deal with other restrictions in the form of reduced mortgage loan rates. I think considering all this, I would rather rent out a condo instead! All these new rules are making it harder to purchase and even harder to manage.”

Info courtesy: Propertyguru