Suburban condo rents are increasingly under pressure in the current market, though for new completions on the city fringe, rents appear to be holding up.
With more choices, tenants are typically relocating to central locations, often preferring newer condos within their affordability range.
"Suburban projects, and projects which do not have large-scale facilities, may lose out in the chase for tenants. Older developments are also losing out tenants to newer developments," said ERA Realty's key executive officer, Eugene Lim.
According to SRX Property data, the median rent at the newly completed D'Leedon in Farrer Road was $4,288 per month in Q2 of 2015, or $3.57 psf per month.
The nearby five-year-old Waterfall Gardens with larger apartment units posted a median monthly rent of $3.92 psf in Q2 and a rental quantum of $8,600 in the same quarter.
The relatively lower rents at the 1,715-unit D'Leedon is a result of stiff competition for tenants at a time when the rental market was trending down. Waterfall Gardens does not have smaller units of one bedder or studios, affording it a certain amount of prestige, even though the project is older.
Sky Habitat, median rent was $3,000 per month, or $4 psf in June and July.
Bishan 8 (15-year-old), the median rent was $3,800 or $3.27 psf in Q2.
Rents have been falling across the board, estimated at 12.5% lower in July than at their recent peak in January 2013, according to SRX Property.
Waterfall Gardens, median psf rents fell 6.7% per cent over the last two years.
Bishan 8 dipped 11.6% over the same period.
Suburban rents are generally lower.
Monthly median rent in Woodhaven in Woodlands came in at $2,100 or $2.98 psf in Q2.
Casablanca (10-year-old) fetches $2.65 psf with a higher quantum of $2,800 on larger units.
Median rents under $3 psf are considered as poor. Tight labour policies have resulted in a very practical leasing market, with 12-month leases being popular generally. Increasing new projects completions will continue to hit rents.
A mid-band rent of $3,000 to $6,000 is deemed to be the most active.
The rental market is definitely facing headwinds in the coming months. With commodities at an all-time low and headwinds in the financial services, expatriates headcount is likely to be flat, if not dropping.