Fintech workers helping to prop up private rental market
More hiring in the fast-growing fintech services sector has been holding up the rents for condominium and private apartments. Rentals for HDB properties, however, slowed last month, according to flash data from real estate portal SRX. Rents for private, non-landed homes last month increased by 0.6% from the previous month, according to SRX. Year on year, private home rents were up by 0.3% last month. However, compared with their record high in January 2013, they were down by 19.6 %.
"We have observed more tenants working in the fintech industry lately," said Orange Tee & Tie head of research and consultancy Christine Sun. She noted that the Government has plans to grow the fintech industry and expects more global tech firms to move here.
"There could be a proliferation of tech giants, banks and even SMEs (small and medium-sized enterprises) recruiting expats with specialised skills in the development of fintech services like cryptocurrency, the blockchain, artificial intelligence, machine learning and mobile banking services, which may lend support to the rental market in the coming months. Private home near some of the upcoming digital tech hubs like Buona Vista, the upcoming Punggol digital district and downtown core may see better demand," she added.
Although the leasing volume dipped by 11.8% last month from a year ago, the number of units leased for the first 11 months rose 5.9% to 51,757 units from 48,882 units in the same period a year ago, "We have observed more tenants opting for shorter lease periods this year, thus generating more leasing transactions in the market," Ms Sun said.
Private rents in the prime or core central region (CCR) rose 1.8% last month from a month ago, while rents in the city fringes or rest of central region (RCR) grew by 0.6%. However, rents in the suburbs or outside the central region (OCR) fell by 0.3%. Year on year, RCR and OCR rents have risen 1.2 % and 0.8% respectively, but CCR rents have dropped by 1.5%. SRX revised the monthly decline in rents for October to 0.9% from the 0.7% estimated earlier. Meanwhile, Housing Board flat rents last month dipped 0.5% from October. Year on year, HDB rent are down by 1.3% from November last year, and off by 15.8% from their last peak in August 2013. SRX revised up the monthly change in October HDB rents to a 0.4% increase from a 0.3% rise.
"HDB rents may continue to see weakness in the coming months due to an increase in the supply of BTO (Build-To-Order) flats that are now ready to be rented out," Ms Sun said. Rents for five-room flats inched up 0.3% month on month. Meanwhile, rents for three-room, four-room and executive flats decreased by 0.5% - 0.7% and 2.3% respectively.