Rental Increases?!!?! :(

[quidsin]

No, I doubt it very much. We are already seeing downturn and I think it still has some way to go but I wouldn't bet on it coming off any more than 20% - after that I'd expect things to level out.

So even if you found a 3 bed condo at 3.5k now, I don't think you'd be picking up for any less 3k in the next 12 months time.

[cooberpedy]

My agent tells me rents are likely to start increasing (albeit marginally) mid-June onwards. He said June to September is roughly the expat season - ie, the time most new expats come into Singapore.

Any truth in this statement?

[Saint]

My agent tells me rents are likely to start increasing (albeit marginally) mid-June onwards. He said June to September is roughly the expat season - ie, the time most new expats come into Singapore.

Any truth in this statement?

Yep, totally true

[cooberpedy]

Really?! Why not March through to June - after the bonus payouts and before the first half of the year is out?

[tekman]

i recently learned that ours was untennanted for about 12 months. simply because the owner refused to budge on the price. i've been told this is not unusual. the whole 'losing face' thing.....[/quote]

thats bs the only thing these fools loose is the money

[tekman]

[maybe if the large multinational company's would stop paying the high rent maybe the greedy landlords might think twice about the high rent opps sorry they dont wont to loose face mv arse

[cbavasi]

Really?! Why not March through to June - after the bonus payouts and before the first half of the year is out?

b/c a lot of people move when the kids are out on school break.

[GarethC]

I came across this post in this forum, I hope the original poster doesn't mind me quoting him. Its quite enlightening..

http://www.singaporeexpats.com/forum/ftopic48634.html

Posted: Sat Mar 29, 2008 8:54 pm Post subject: Singapore property Going Down The Tubes?

--------------------------------------------------------------------------------

I sent my buddy an e-mail asking if it was a good time to buy property in Singapore...

He's a Hong Kong based Asia property analyst for a small successful private investment bank.
He sent me this....(don't shoot me, I'm just the messenger.)

Well...I would wait at least another 6 months to a year.

We told clients and investors to sell all Singapore holdings (property, stocks and everything else) in June 2007. We determined that prices would never, ever be higher and were predicting a 15% drop in pricing by March 2008 and 25% drop by June 2008.

Rationale was simple and not rocket science.

#1. There was no demand for housing when the boom started.
The vacancy rates on existing housing were above New York, London, Hong Kong, Tokyo and other major urban market levels. A Singapore property boom made no sense at all.

#2. Singapore GDP...nice impressive numbers. But the growth was 99% construction related. There is no economic growth when the construction boom ends and those numbers are subtracted from the total.

#3. The existing luxury housing vacancy levels in Singapore were adequate to fill the needs of Singaporeans and any possible influx of new senior executives for the next 5 years. Thus, there was no demand for executive luxury housing in the market.

#4. Value for money on Singapore property for foreign investors is not good when compared to other projected growth economies. (several factors are weighed including psf, quality of workmanship, size of economy, projected growth of economy, lifestyle and culture of the market.)

#4. The targeted future population numbers of Singapore are pie in the sky and completely without substance. Singaporeans are not having kids and the demand for jobs in Singapore will be service led lower paying jobs to supply the planned tourism developments. Non of these new inhabitants will be buying or renting condo's, especially in the high-end. And tourists visit, they don't buy or rent.

#5. Singapore is not a supply/demand driven economy. It is a small, managed economy. Thus, the property development plans were lofty, risky, and not based on future real supply/demand realities.

#6. There is a lack of real, transparent, objective information available in the Singapore market about the Singapore market. This leads to investors belief in hype and speculation rather than economic principles.

#7. Global money supplies and markets are taking a beating and will continue to take a beating. The second call on the sub prime products happens this June so more big losses are expected. This will stall or even damage the Singapore economy.

We expect distress sales in the property market to start soon. The high-end rental market is non-existent and the higher % of all unit sales were high-end investment property, speculator driven.
These buyers need "wealthy" renters to subsidize the million dollar mortgages. Most locals cannot afford the rents the market is demanding.
Surveys of multinational companies and banks have indicated that there is no boat-load of expats with a big housing allowance arriving at the Singapore port anytime soon. The new owner is now stuck with 100% of a very expensive monthly mortgage.

Here is an example of one major high-end development I'm following to prove the point. These are some very telling numbers.
600+ units launched
20+ remaining at $2,000 per square foot via the developer.
100+ units previously sold are now for sale privately less than 7 months after launch for $1,300 to $1,600 per square foot.
The reason...no rental income.
That tells me that property owners are willing to admit that market prices are down 25%+ already. Unfortunately, even at a 25% discount, there are no buyers.

Existing Singapore residents are keeping the rental market buoyant due to the fact they sold their old places and are waiting for the prices to drop...OR...waiting for their new unit to be completed. These people are relatively small in overall numbers and definitely not going to rent high end luxury units. They are driving HDB, middle priced housing rents up right now. They are also demanding 12 month leases or even less if they can get it proving that they are waiting to move or sitting on the sidelines waiting for prices to drop.

The Singapore property market is massively oversupplied today and more units are on the way. This is not good. This is should be extremely troublesome to anyone who owns property anywhere in that market. The potential valuation losses in the property market could be enormous, especially at the high-end. Overall prices could sink well below SARS levels and this could happen within 6 months to a year.

The short lived property boom was very much like a pyramid scheme.
It was all hype and no substance.
The first guys in are now smoking big cigars.
The last guys in are now left holding the ashtray.

[pixel8]

A bump for this topic.

Would love to read more actual examples of rents being increased.

[sundaymorningstaple]

Needed to get your post count high enough so you can activate your PM function izzit!

[pixel8]

You thought wrong.

What's the big deal with PM?

Needed to get your post count high enough so you can activate your PM function izzit!

[Thaiclan]

Our contract recently came up with Far East and they did not raise the rent (we didn't renew however as FE are TERRIBLE landlords!). We looked at a few places and one house that was up for $6,700 we bid $5,800, at first the agent laughed, but 2 days later they contacted us asking if we wanted it. We didn't take it as we actually found another place that had been empty for 5 months and they dropped the rent from $9000 to $6,500! So I know this post is about rent increases but we've seen the opposite (moved August 1st). In fairness both of these large reductions were from private landlords, the likes of Far East keep prices artificially inflated for their own purposes.

[pixel8]

That's great. Good to know supply > demand in your favor

[frenzal]

Just based on accommodation boards, it seems that rental prices are generally going down lately

[HunBunny80]

True. Houses have come down more than 10% for the area that I am looking at. Alot of landlords are still very optimistic but they will definitely consider offers as much as 20% lower than the asking price when they get desperate. I think a few of them are quite desperate now.