THE return of expatriates to Singapore in the past year has sparked a rent rise in high-end condominiums and niche good class bungalows.
Rents of high-end condos have risen 12 per cent since the dark days of late 2002 and are likely to head further north, said property consultancy Savills Singapore.
The rise has been steeper in the past 12 months as the better economy attracted expats, particularly in the finance industry, back here, shrinking the rental supply of quality homes.
In the coveted districts of 9 and 10, rents of fairly new high-end condos - less than 10 years old - have shot up by as much as 20 per cent in the past year, said Mr Nicholas Mak, the research director at property consultancy Knight Frank. And they could rise by a further 10 per cent to 15 per cent in the next 12 months, he said.
Savills is more conservative, but still optimistic. 'The high-end rental market remains very vibrant with demand exceeding supply for good properties,' said its senior manager of residential leasing, Mr Philip Peh.
'We see rentals going up by another 3 to 5 per cent over the next 12 months, especially for properties in prime areas and high-end properties.
'As the Government pushes to make Singapore the regional hub for financial management, research and development, education, et cetera, we have started to see more senior executives with good budgets and they are looking for good homes.'
Landseer Property Services, which helps expats with housing, has seen more Indians arriving for middle management jobs in the audit, legal and information technology industries, as well as a rise in the number of European expats from the banking, chemical and pharmaceutical sectors.
'However, there is still a cautious approach to expanding costs too quickly and some corporate rental budgets have not adjusted significantly since 9/11 and Sars,' said its director, Ms Marina Mendez.
Six weeks ago, a 2,852 sq ft unit at Grange Residences in Grange Road, was rented at $14,500 a month. The same unit a year ago would have fetched only about $13,000, said Landseer agent Raymond Han.
Rents for these high-end condos seem to be near the ceiling, but that is not the case for landed homes where there is limited supply, he said.
Indeed, rents of the most prestigious bungalows have risen by about 10 per cent in the past year, said Knight Frank's associate director of Regal Homes, Mr Douglas Wong.
The lease for an 8,000 sq ft good class bungalow in Bin Tong Park was just renewed to $20,000 a month, up from $17,000 in 2004.
Still, the wider market is less exciting, with plenty of stock remaining in the suburban areas, consultants said. And the rental market for condos weaken with their age.
Net rental yields overall remain at about 2.5 per cent to 3.5 per cent.
'A lot of action is taking place in districts 9, 10 and 11, but it is still a tenants' market in the suburban areas,' said Mr Eugene Lim, assistant vice-president of the property agency ERA Singapore.
Mr Mak said rents of suburban condos near MRT stations or the city have risen by 5 per cent in the past year.
But overall, suburban rents have largely stayed flat, said Mr Lim.
He added that those renting suburban condos may be expats on local terms or with rental budgets as part of their pay. As they also have the option of HDB flats, rents of low-end suburban condos are unlikely to rise much.
joyceteo@sph.com.sg
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