Demand up for private rental homes

Demand for private rental homes rose in the first quarter and could grow further as the economy improves, but the glut of vacant properties means rents will likely weaken or stay flat.

It noted that there were 13,077 leases signed in the three months to March 31, up 4 per cent on the same period last year.

Much of the rise was due to an 11.2 per cent increase in leases in what is called the Rest of Central Region, an area that includes Bishan, Toa Payoh, Little India, Queenstown and Geylang.

Leases signed for homes in this zone accounted for 37 per cent of all rental transactions in the first quarter of this year - its highest proportion since 2004.

Leases in the Outside Central Region - where most mass market condominiums are - also fared well, rising 1.5 per cent year-on-year to account for 30.6 per cent of total transactions.

But leases in the Core Central Region, which includes the prime districts, financial zone and Sentosa Cove, fell 1.1 per cent year-on- year to 32.4 per cent of total transactions.

It added that tenants also have more locations in the Rest of Central Region to pick from, with an increasing number of newly completed developments.

More than 2,500 private residential units were completed at major projects in this zone last year, including Ascentia Sky in Alexandra View, Waterbank at Dakota in Dakota Crescent, and The Interlace in Depot Road.

It said the strain will be particularly acute in the high-end market, "as expatriates' housing allowances continue to be trimmed and there is an increasing number of newly completed high-end projects (on) the market".

Suites at Orchard in Handy Road, with 118 units, and the 121-unit Loft@ Nathan in Nathan Road are among the high-end projects due to be completed next year.

The average monthly rent for high-end flats has been sliding since mid-2011 and it slipped a further 0.2 per cent to $4.84 per sq ft in the first quarter.

The overall vacancy rate of private homes climbed to 6.6 per cent from 6.2 per cent in the previous quarter, representing 19,284 empty private residential units.

The Waterview in Tampines Avenue 1 with 696 units, the 473-unit Vacanza@East in Lengkong Tujoh, and 408-unit The Shore Residences in Amber Road all competed in the east in the first quarter.

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Demand up for private rental homes

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