ST : HDB rents 'holding steady'

Dec 6, 2009

HDB rents 'holding steady'

Plenty of flats available to meet demand by IRs' foreign employees

By Joyce Teo

Owners of public flats not far from Sentosa, and with rooms to spare, take note.

Foreigners slotted to work at the soon-to-open integrated resort (IR) there are scouting for rental units.

But property agencies say that given the large stock of Housing Board flats up for rent islandwide, overall rentals have remained steady. Most will likely remain so into the first quarter of next year.

HDB rents have, in fact, not fallen much in spite of earlier expectations.

The experts say that foreigners recruited to work at Resorts World Sentosa (RWS) are contributing to the demand, but have yet to boost HDB rents generally.

Two property agencies note a rise in HDB rental deals in the fourth quarter, thanks to foreigners working at RWS.

But the search already started some time back, said RWS. It started sourcing for suitable accommodation early this year, with the help of a reputable service provider, said a spokesman.

The IR, which opens early next year, was reportedly looking for hundreds of HDB flats for rent. Some workers have apparently moved into their rented flats while another group is scouting around.

But while a few hundred units may seem a lot, they are 'marginal', said PropNex chief executive Mohamed Ismail. He said that, overall, the HDB rental market has remained unchanged since the third quarter, and should hold flat this quarter and the next.

Even a demand spike of 500 flats translates to less than 3 per cent of an estimated minimum of 20,000 rental transactions for all HDB flats here, he said.

C&H Realty managing director Albert Lu agreed, adding that 'the market is big enough to absorb this demand unless it comes in a very short period'.

'I don't see a dramatic rise in HDB rents because private rents have dropped so some may have moved back to private housing,' he said.

Another agency boss said the IR demand will help to compensate for the poorer sentiment in the market and keep rents stable.

Private rents fell in the third quarter, though the pace of decline has slowed from the second.

A recent Inland Revenue Authority of Singapore statement said HDB rentals have stabilised after a moderate decline from late last year to the middle of this year. They have since begun to rise, it said.

The latest HDB rent data - for July to September - showed that the median sublet rents for two-room and five-room flats remained unchanged while that of three- to four-room flats and executive flats saw a rise of up to $100.

Some high-priced HDB rental deals were done this year but these were for nicely renovated furnished flats right next to MRT stations, Mr Lu said.

One of the top five HDB rental deals his agents closed in the past two months was for a $2,300-a-month, fully furnished three-room flat in Upper Cross Street.

At Dennis Wee Properties, director Chris Koh said: 'We're seeing more inquiries from foreigners for HDB flats for one to two years' lease...There's renewed interest maybe because of the integrated resorts.'

He said those working for RWS will likely look for flats in Telok Blangah or even Clementi, while those working for the Marina Bay IR would be keen on flats nearby and all the way to Toa Payoh.

Those looking at renting HDB flats are likely to be chefs, technicians or middle managers with a typical budget of around $1,500, said Mr Koh. Some may stretch their rental budget to $2,000 - not enough for private units in the areas they want.

Still, an industry source who declined to be named said because these would-be tenants want only approved HDB flats in specific locations such as Telok Blangah, rents in those areas could rise.

The current average monthly rental in Telok Blangah for a three-room HDB flat is about $1,700 while a four-room HDB flat goes for about $2,000, said Mr Lu. Recent advertisements for HDB rental deals in the Central area including places such as Tanjong Pagar show asking prices of up to $2,300 a month for a three-room flat and as much as $2,800 a month for a five-room flat.

joyceteo@sph.com.sg