SINGAPORE: When Shawn Lau collected the keys to his two-bedroom Treasure at Tampines condominium unit in December 2023, he was anticipating a swift rental process in a market that seemed to promise lucrative returns.
However, what followed was a stark reality check. Landlords like Lau have been left grappling with prolonged vacancies.
The once-hot rental market, characterised by high demand and good returns, has been softening as newly completed units flood the market, real estate agents told The Straits Times.
Deals used to close within a day, but no longer, observed Alex Low of PropNex Realty.
The surge in demand for rental units in the past three years was partly driven by pandemic-induced delays in the construction sector.
The influx of foreign talent, international students and an increasing number of Singaporeans seeking their own living spaces also heightened this trend.
But rentals in the last three months of 2023 fell for the first time in three years, Urban Redevelopment Authority data showed.
PropNex real estate agent Jasmine Lau said: “Since the second half of 2023, we have noticed many expats returning home and Singaporeans transitioning to their build-to-order flats.
“These factors have contributed to the high supply of condos available for rent.”
Luqman Hakim, chief data and analytics officer at property search portal 99.co, has noticed a higher supply of condo rental units and lower rental prices since the middle of 2023.
He attributed this to landlords being under more pressure to quickly rent out their units to service their mortgages when interest rates unexpectedly rose to around 3.8% in 2023, as well as more units obtaining temporary occupation permits.
Home loan rates in Singapore shot up from around 1.15% in the fourth quarter of 2021 to over 4% in November 2022. — The Straits Times/ANN
