BT : Core central home rents up 12% in Q2 - 28 Jul 07

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Published July 28, 2007
Core central home rents up 12% in Q2
Rising sentiment filtering down to other areas

(SINGAPORE) Some say that rentals for private homes islandwide have never
risen so much from one quarter to another over the past decade.

Not surprisingly,it was the Core Central Region (CCR) - which includes prime
districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - that
posted the biggest increase in rents for condos and private apartments in Q2
over the preceding quarter. They rose 12 per cent.

But the buoyant demand for housing in the prime areas continued to filter
down to the rest of the market in Q2, as reflected in a 10 per cent rise in
URA's rental increase for the Rest of Central Region (RCR) and a 9.4 per
cent hike in the Outside Central Region (OCR).

OCR covers suburban mass-market locations like Woodlands, Clementi, Jurong,
Hougang, Tampines and Bedok, while RCR includes areas like Bukit Merah,
Queenstown, Geylang, Toa Payoh and Katong.

Knight Frank said that, based on its research, rentals for properties in the
East Coast, Thomson and Bishan areas grew by a strong 10 to 12 per cent
quarter-on-quarter in Q2 this year, matching the rental growth seen in the
CCR.

'Noticeably, more foreign companies and expatriates are becoming more
concerned with rising housing rentals and costs. Nonetheless, their top
priority is to be able to enrol their children in international schools
here, where the supply of teachers and space for students is far more
inelastic when compared to rental properties,' Knight Frank director
(research & consultancy) Nicholas Mak said.

URA's 12 per cent rental index hike for the CCR in Q2 was much higher than a
7.6 per cent gain registered in Q1.

CB Richard Ellis executive director Li Hiaw Ho said: 'The slew of en-bloc
sales in the past two years being concentrated in the CCR has led to a
shortage of apartments for rent in the region, as reflected in this region
leading the pack in terms of the increase in the rental index for non-landed
properties in Q2.

'This uptrend is expected to continue as developments which have been
collectively sold give way to redevelopment. Some of the major en-bloc sales
in the prime area in Q2 include Leedon Heights, Himiko Court, Elmira Heights
and Fairways Condominium.'

URA's overall rental index for private homes in Q2 was up 10.4 per cent from
the preceding quarter, and 31.2 per cent higher year-on-year.

'This is the highest quarter-on-quarter, and year-on-year growth since URA
made rental data available to the public. Nonetheless, as of Q2 2007,
private residential property rentals are still about 21.4 per cent lower
than the all-time high in Q1 1996,' said Knight Frank's Mr Mak.