Updated from : The Business Times, 15 Oct 2020
THE phased reopening of Singapore’s border with Malaysia boosted the property rental market last month, after rental volumes in August hit their lowest point in 12 months.
Rents and leasings for both HDB and condominiums rose in September, according to flash data from real estate portal SRX Property released on Tuesday.
HDB rental volumes surged 49.7 per cent month on month to an estimated 1,611 units in September, from 1,076 units the month before.
Overall HDB rents, meanwhile, edged up 0.4 per cent from August, and by the same rate year on year. They are still down 14.2 per cent from their peak in August 2013.
Rental volumes for condominiums also jumped, by 49.1 per cent month on month. An estimated 4,252 units were rented in September, compared with 2,852 units in August.
Condo and private apartment rents inched up 0.2 per cent but are down 0.4 per cent year on year. They are 17.1 per cent lower than their the peak in January 2013.
Nicholas Mak, ERA Realty’s head of research and consultancy, said Malaysian workers returning to work in Singapore after the border reopened in August, is one of the main sources of leasing demand.
The increase in demand can be seen in residential areas near industrial estates such as Jurong, Woodlands, Admiralty, Eunos and Ubi, he said. “Leasing demand was so strong that HDB flats that were put up for lease in locations near industrial estates could be snapped up within a month after the advertisement appeared,” Mr Mak said.
He also noted that the travel restrictions have also prevented more foreign students from coming to Singapore and there were foreigners who were retrenched amid the weakened economy.
As a result, the increase in leasing demand from Malaysian workers will be balanced by the drop in demand in other sectors of the rental market. “The overall effect could be neutral,” said Mr Mak.
Year on year, rental volumes for HDB flats are still down by 20.7 per cent, and 10.6 per cent lower than the five-year average volume for the month.
As for condos and private apartments, leasings are 8 per cent lower than September 2019, but 3.2 per cent higher than the five-year average volume for the month.
Christine Sun, head of research and consultancy at OrangeTee & Tie, noted that there is a growing number of tenants opting for shorter leases as many have the intention of moving elsewhere if they manage to find cheaper accommodation. “As leases are now shorter, there will be more transactions recorded over time,” she said.
Ms Sun added: “We have also observed an increase in rental demand for HDB resale flats from non-construction companies. Some employers have been actively relocating their workers from dormitories to prevent their workers from being infected with the novel coronavirus and avoid the hassle of observing stringent regulations imposed in some dormitories.
“In light of the weak employment climate and travel restrictions that are still in place, the leasing market may remain soft with some rental price weakness in the coming months.”
Singapore reopened its border with Malaysia for essential travel on Aug 17.
Since then, hundreds of Malaysians – from factory workers and salesmen to electricians, painters and carpenters – have crossed the Causeway to Singapore for work.
Many of them were among some 100,000 Malaysians who commuted daily to Singapore for work before the pandemic, and had returned under the Periodic Commuting Arrangement (PCA) scheme.
People who enter under the PCA scheme must stay in the country they work in for at least 90 days before they can return on home leave.
The inflow has come as a relief for many businesses, which lost their key employees when the Malaysian government closed the border on March 18 in response to a surge in Covid-19 cases.
Henry Lim, associate division director with Propnex Realty, said he has had more enquiries for rentals, with most Malaysians looking for flats or rooms to rent in areas near to industrial estates like Woodlands, Choa Chu Kang and Sembawang.
They also want shorter leases of six months but most landlords look for a minimum one-year lease.
The high demand for flats in those areas has resulted in some being snapped up within a day, said Mr Lim. He added that some units in highly sought-after locations can command 10 to 20 per cent more in rent, although overall HDB rents have only inched up.
“For example, the monthly rent for a three-bedroom HDB flat in Woodlands now starts from S$1,800, up from S$1,600 before the pandemic hit. And you can’t find anything below a monthly rent of S$2,200 for a four-bedroom HDB flat there.”
Malaysia Chan Chee Hao, 36, was among the first batch of Malaysians who walked across the Causeway to Singapore on the first day of the re-opening of the border.
After serving seven days of a stay-home notice in a budget hotel room in Geylang, Mr Chan had difficulty finding a place to stay near his workplace at Sungei Kadut.
“I budgeted S$600 for a room to myself, but the rent kept rising for every unit that I saw. I found out that it would cost between S$600 and S$850 per person to share an air-conditioned room,” said Mr Chan. “I called many property agents, but there was nothing available.
Mr Chan managed to stay with his brother who was renting a room in Sin Ming. “My brother was paying a monthly rent of S$500. It was increased to S$900 for two people,” said Mr Chan.
After staying with his brother for two weeks, he moved to stay with his sister in Sengkang. “I am hoping for the border to reopen fully, so I can return to commuting daily by bike,” said Mr Chan.
Separately, National Development Minister Desmond Lee on Wednesday said that HDB flats selling for at least S$1 million made up 0.3 per cent of total resale transactions this year. There have been 38 such million-dollar flats sold as of August this year, out of 14,400 resale transactions.