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| | | | | | | SINGAPORE : Housing in non-prime areas like Changi, Buona Vista and even Serangoon is catching the eye of expatriates.
Analysts say tenants in this mid-tier market seek neighbourhoods that are homey and located near MRT stations.
Better yet, they say rising rental prices in these markets are spelling good news for homeowners.
Neighbourhoods in the eastern tip of Singapore seem an unlikely place for expatriates to jostle for rental flats.
But this leasing season, property agents say units here take just under three weeks and sometimes days to let - compared to 3 months a year ago.
Mohamed Ismail, CEO, PropNex, said, "The Changi area has all the while had the presence of expo and the logistic business. But lately, more businesses of the logistic group, as well as the air hub shifting most of its operation towards the other side...I've seen a keen interest in the last couple of months.
"These hubs actually support middle management expatriates with a middle budget range of S$1,500 to S$3,000."
Analysts say the phenomenon is due to the rise of Asian expatriates with smaller budgets.
They also say rising rentals are pricing some of the traditionally more popular or prime areas out of some companies' budget.
There is also a theory that the recent slew of en-bloc sales is creating demand for rental properties in the outlying areas.
These reasons are driving down the vacancy rates of suburban rental housing in areas like East Coast, West Coast and even Serangoon.
Analysts say up to 15 percent of flats in such off-prime estates sat empty a year ago.
Now only about 7 percent of the apartments is vacant.
And so, rentals in such areas are rising as well.
A three-bedroom flat in the Kovan area now leases for some S$2,300 - up nearly 30 percent from six months ago.
Donald Han, Managing Director, Cushman & Wakefield, said, "It's quite a well spread demand that we're seeing and it only happened over the last 6 to 8 months because of the crunch in terms of the supply of available stock that's in the marketplace.
"The fact that rentals can go up in terms of price, we will eventually see increase in terms of yield. And as a result, investors will start to come in, taking advantage of higher yielding properties. As a result, you will see a rise in your capital values."
Market watchers expect the rental demand for mid-tier residential properties to stay.
They say Singapore's role as a hub will continue to attract managers of all experience levels with varying housing budgets. - CNA/ms
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