Monday, November 3, 2008

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HDB Rents to Fall as Private Property Rents fall

Downward slide in HDB rents may take a few months
HDB rental market will be the next segment of the local property market to be hit by the global financial crisis, reported Straits Times today. This may very well mark the beginning of the weakening in the HDB market.

Rents of Housing Board flats, which have been climbing steadily, largely on demand from foreigners squeezed out of the private homes market, are up only slightly in the third quarter even as rents of private homes fell. But property experts say HDB rents have likely peaked. They will hold steady for the next several months before they begin to crack from the pressure of falling rents in the private homes market.

'Any decline in private rents is going to contribute to the downward slide in HDB rents, but it may take a few months for the impact to filter down,' said Knight Frank's director of research and consultancy Nicholas Mak.

Downward Pressure on HDB Rents Already Showing
The pressure is already starting to show: Rents for HDB flats have shown smaller increases in the third quarter. Median rents for five-room flats have risen by $100 every quarter this year to $2,000 in the third. But median rents for three-room flats remained unchanged at $1,500 in the three-month period to Sept 30 while median rents for four-room flats showed a smaller $50 rise to $1,800, from $1,750 in the second quarter and $1,600 in the first.

May also want to read:
Singapore Property Forecast: HDB and Private Property will trend in opposite direction until ..,
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When the bubble of greed and fear burst, guess who suffer?
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HDB Resales: West Sees Highest Price Increase


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