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Residential Rental Market Q3 2017

At MortgageWise, we aim to provide our property investor clients with a snapshot of the performance of Singapore residential rental market regularly through our own basket of condos which provides more meaningful and personalinsights than just a broad-based index from URA. Properties are not created equal and some will rise or fall more than the rest.

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The condos selected in the basket are deemed iconic enough to be representative of prices in a particular precinct that is smaller than a whole central region or outside central region as defined by URA.  For areas outside central region we pick condos either right at or nearest MRT stations as these tend to be well sought after by investors.  Our basket would allow property investors to see the actual variation in prices over time for a group of fairly well-known and popular condos in Singapore.  However, our illustration is nothing more than simple averages of all transactions done over 6-month periods (all data from URA) so do take the reading with a pinch of salt.  We also highlight the highest rental achieved in the period.

We will look at the average rentals and highest rent achieved for last 6-month period (Apr to Sep 2017) and contrast that with the previous 6-month period (Oct 2016 to Mar 2017).  We will highlight double-digit percentage change (above 10% for average and above 20% for mode) for you in blue (increase) and red (decline).

rental prices Singapore Oct 2017

It is a mixed bag performance in the last 6 months with both falling and rising average rentals across the island in our condo basket, so it will be hard to comment on trends.  It is best left to the individual investors to mull over the specific readings in the various precincts.

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We do noted however there are definitely more blue readings (over 10% increase) in the highest rent achieved in the most recent 6-month period.  This suggests in general there are more units that “out-perform” the average rentals, or in other words, the premium or choice units in these developments are able to command higher rents than in 2016.

This trend is even more evident in the prime district of Orchard, River Valley, Marina Bay and Sentosa/Keppel Bay, which likely indicates that more tenants are willing to pay for choice units in the central region albeit the average rentals are still dropping across the board in this segment.

The average rentals in the newer T.O.P. (less than two years) condos in the outskirts MRT locations are however picking up slightly and more tenants are again willing to pay premium for choice units in these developments.  This likely suggest that after the 1stinitial low rents in these new condos, the owners are now getting improvements on their rental yield.

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In an environment where rentals are not expected to pick up in a big way even with improving sentiments in the property market, it is ever more so imperative for owners to manage their mortgage costs in order to increase their overall returns on real estate investment.  To this end, it makes perfect sense to work with a trusted mortgage consultant partner who can prompt you whenever there is an attractive home loan package from the banks. If you have yet to work with one, speak to us today.

And those who are looking to buy condo in Singapore soon should contact us now to enjoy the special all-in private purchase legal fee of $1,800 (includes mortgage stamp duty and GST) – a privilege reserved for MortgageWise clients.

At MortgageWise, we seek to provide thought leadership in the area of mortgage planning in Singapore, taking deep dive into developments and news on mortgages & helping clients track interest rate movements.  We do not just go for one-time business with clients but rather choose to build long trusting relationships by giving truly independent advice to the extent of losing the deal.  We strive to become the first-choice mortgage partner for homeowners and the creditable distributor of mortgage products for banks and financial institutions in Singapore.

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