THE DYNAMICS OF DEMAND AND SUPPLY & SHIFTING TRENDS IN THE SINGAPORE RENTAL MARKET
Singapore has been declared as one of Asia’s most expensive cities. Not only the property market but also the job market is going through a slump here. It’s common news that the Oil & gas sector has been affected due to the global crude oil crisis.
Demand for fuels is recovering in some countries, and that could help crude oil prices recover in the next year or two meanwhile as the market faces a slump we also see other sectors being affected. Banking & Finance sector has been affected in Singapore as well. People have become more cautious and have changed buying trends due to which even Consumer Durables sector has been affected. This wave has caused a fracas.
Demand – Supply
As lesser jobs are generated there is a lesser influx of expatriates migrating to Singapore which has caused a fluctuation in demand and supply. There’s also the fact that expatriates whose jobs have been affected have also moved out of Singapore. This has led to an increase in supply of houses and lesser demand for them, thereby reducing the house rents.
Adding to this is the chain of stringent cooling measures by the Singapore Government to avoid a Property Bubble here which imposes a lot of restrictions in the rental market in the HDB arena.
The Government also imposed a quota system for house rentals in the HDB sector with effect from 16th January 2014. This quota system was introduced after the riots in Little India to help maintain a good ethnic mix in HDB estates.
HDB said the measure "is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland".
Malaysians are not subject to this quota in view of their close cultural and historical similarities with Singaporeans. The quota is set at 8% at the neighbourhood level and 11% at the block level, and applicable if any subtenant renting the whole flat is a non-Malaysian non-citizen. If the quota is reached, only Singaporeans and Malaysians can rent a flat in that neighborhood/block.
Information on the quota allotment is available on HDB's website, It is updated on the first of every month and is valid for the whole month. It changes every month depending on transactions during the month.
Click here to check the quota.
This policy has worked as a deterrent in renting HDB flats.
SHIFTING RENTAL TRENDS
The influx of new private property units in the market has also led to a fall in the rental price of private properties.
As actively practicing property agents, we (DreamHomes) see a shift in renting trends where expatriates who used to earlier prefer to rent HDB homes are now choosing condominium units instead.
The gap between the rental prices of HDB units and Older Private property units has narrowed quite a bit, making condominium units which come with facilities more affordable and reachable to new expatriates.
The dynamics of demand and supply have largely impacted the market and it’s effects can be seen. It looks like this slump may be here to stay for a while unless there’s a drastic change in the market dynamics or economic policies.
My Article was published on 3rd April 2016 @ Propertyguru, Singapore's most popular real estate website which enjoys a high viewership in Singapore and abroad.
It's a proud moment for me.
Singapore has been declared as one of Asia’s most expensive cities. Not only the property market but also the job market is going through a slump here. It’s common news that the Oil & gas sector has been affected due to the global crude oil crisis.
Demand for fuels is recovering in some countries, and that could help crude oil prices recover in the next year or two meanwhile as the market faces a slump we also see other sectors being affected. Banking & Finance sector has been affected in Singapore as well. People have become more cautious and have changed buying trends due to which even Consumer Durables sector has been affected. This wave has caused a fracas.
Demand – Supply
As lesser jobs are generated there is a lesser influx of expatriates migrating to Singapore which has caused a fluctuation in demand and supply. There’s also the fact that expatriates whose jobs have been affected have also moved out of Singapore. This has led to an increase in supply of houses and lesser demand for them, thereby reducing the house rents.
Adding to this is the chain of stringent cooling measures by the Singapore Government to avoid a Property Bubble here which imposes a lot of restrictions in the rental market in the HDB arena.
The Government also imposed a quota system for house rentals in the HDB sector with effect from 16th January 2014. This quota system was introduced after the riots in Little India to help maintain a good ethnic mix in HDB estates.
HDB said the measure "is to prevent the formation of foreigner enclaves in HDB estates, and maintain the Singaporean character of our HDB heartland".
Malaysians are not subject to this quota in view of their close cultural and historical similarities with Singaporeans. The quota is set at 8% at the neighbourhood level and 11% at the block level, and applicable if any subtenant renting the whole flat is a non-Malaysian non-citizen. If the quota is reached, only Singaporeans and Malaysians can rent a flat in that neighborhood/block.
Information on the quota allotment is available on HDB's website, It is updated on the first of every month and is valid for the whole month. It changes every month depending on transactions during the month.
Click here to check the quota.
This policy has worked as a deterrent in renting HDB flats.
SHIFTING RENTAL TRENDS
The influx of new private property units in the market has also led to a fall in the rental price of private properties.
As actively practicing property agents, we (DreamHomes) see a shift in renting trends where expatriates who used to earlier prefer to rent HDB homes are now choosing condominium units instead.
The gap between the rental prices of HDB units and Older Private property units has narrowed quite a bit, making condominium units which come with facilities more affordable and reachable to new expatriates.
The dynamics of demand and supply have largely impacted the market and it’s effects can be seen. It looks like this slump may be here to stay for a while unless there’s a drastic change in the market dynamics or economic policies.
My Article was published on 3rd April 2016 @ Propertyguru, Singapore's most popular real estate website which enjoys a high viewership in Singapore and abroad.
It's a proud moment for me.
