Monthly rents for non-landed one to three-bedroom private homes in Singapore have declined 18% from 2013 to 2016 to date. Amid the downtrend, monthly rents in the Central Region have fared better compared with those in the suburban areas.
The resilience of rents in the Central Region is likely owing to the convenient commute it offers to the large concentration of office workers in the CBD. Rental homes in the city-fringe area, meanwhile, also offer a good mix of convenience and affordability to tenants with tighter budgets.
The average monthly rent for one-bedroom units in the Core Central Region (CCR) has declined 17%, or $631, from $3,738 in 2013 to $3,107 in 2016 to date. In the Rest of Central Region (RCR), the average monthly rent for similar units declined 17%, or $537, from $3,135 to $2,598, while the rent for one-bedroom units in the Outside Central Region (OCR) fell 19%, or $533, from $2,750 to $2,217 over the same period (see table).
The average monthly rent for two-bedroom units has shown greater resilience compared with that for one-bedroom units. Two-bedroom units in the CCR were the most resilient, with an 8%, or $414, decline in average monthly rent, from $4,914 in 2013 to $4,500 in 2016. The monthly rent for two-bedroom units in the RCR fell 9%, or $344, from $3,699 to $3,355, while the rent for two-bedroom units in the OCR fell 10%, or $323, from $3,195 to $2,872, over the same period.
The Edge Property has compiled a list of the five most resilient condos in each market segment in terms of monthly rent. The list comprises developments where the average monthly rent for two-bedroom units declined by the smallest percentage between 2013 and 2016 to date.
The implied gross rental yield is computed based on the average year-to-date resale price and monthly rent, as at Oct 24. Developments with fewer than five rental contracts for two-bedroom units in the reference period and fewer than three resale caveats in 2016 to date were excluded from comparison.
The list also excludes developments located in Pasir Ris, Sengkang, Bedok, Hougang and Clementi, which are suburban areas that are likely to see fierce competition for tenants owing to the large supply of newly completed condos coming on stream over the next three years.
Rents for two-bedroom units have shown greater resilience than those for one-bedroom units
Core Central Region
The average monthly rent for two-bedroom units at The Sail @ Marina Bay is $5,182
At The Sail @ Marina Bay, 16 two-bedroom units have changed hands so far this year, at an average price of $1.8 million. The average monthly rent for two-bedroom units is $5,182, based on 164 rental contracts, which translates into an implied gross rental yield of 3.5%. The Sail @ Marina Bay is a leasehold development with 1,111 units that was completed in 2008. There are currently four MRT stations within walking distance of the development: Downtown, Raffles Place, Telok Ayer and Marina Bay.
The implied gross rental yield for two-bedroom units at One Shenton is 3.4%
One Shenton is a 341-unit leasehold development located diagonally opposite Lau Pa Sat. Completed in 2011, it is within walking distance of the Downtown, Telok Ayer and Raffles Place MRT stations, as well as the upcoming Shenton MRT station. So far this year, three two-bedroom units have changed hands at an average price of $1.8 million, and there have been 47 rental contracts with an average monthly rent of $5,054. This implies a gross rental yield of 3.4%.
The average monthly rent for two-bedroom units at Marina Bay Residences is $6,498
Marina Bay Residences, completed in 2010, is located a stone’s throw away from The Sail @ Marina Bay. The leasehold development has 428 units. So far this year, six two-bedroom units have been sold at an average price of $2.3 million. There have been 74 rental contracts for two-bedroom units with monthly rent averaging $6,498, which implies a gross rental yield of 3.3%.
The implied rental yield for two-bedroom units at Soleil @ Sinaran is 3.0%
Soleil @ Sinaran is a 417-unit condo next to the Novena Square mall, which is above Novena MRT station. The leasehold development was completed in 2011. The implied gross rental yield is 3.0%, based on the six resale transactions so far this year that averaged $2.1 million, and 73 rental contracts with an average monthly rent of $5,377.
Hilltops is located close to the Orchard Road shopping belt
Hilltops is located on Cairnhill Circle, about 500m as the crow flies from the Orchard Road shopping belt. It is a freehold condo comprising 241 units that was completed in 2011. So far this year, seven two-bedroom units have changed hands at an average price of $3.1 million, and there have been 22 rental contracts with monthly rents averaging $7,841. This implies a gross rental yield of 3.0%.
Rest of Central Region
So far this year, seven two-bedroom units at Vista Park have been sold at an average price of $800,000 and the average monthly rent is $2,671, based on 47 rental contracts. This gives an implied gross rental yield of 3.9%. Vista Park is a leasehold development that comprises 187 non-landed homes and 22 strata-landed units. Completed in 1985, it is located on South Buona Vista Road, adjacent to Kent Ridge Park.
The implied gross rental yield for two-bedroom units at One-North Residences is 3.5%
At One-North Residences, a 405-unit leasehold development completed in 2009, seven two-bedroom units have been sold so far this year, at an average price of $1.6 million. Based on the 52 rental contracts with an average monthly rent of $4,467, the implied gross rental yield is 3.5%. One-North Residences is located within walking distance of the One- North and Buona Vista MRT stations.
The Esta is a freehold development located within walking distance of the upcoming Amber MRT station. Completed in 2008, it comprises 400 units. So far this year, three two-bedroom units have been sold at an average price of $1.5 million and there have been 13 rental contracts with monthly rents averaging $3,954. Based on this, the implied gross rental yield is 3.1%.
Jardin was completed in 2012 and comprises 140 units
Jardin is located opposite Bukit Timah Plaza and within walking distance of the King Albert Park and Beauty World MRT stations. The freehold condo was completed in 2012 and comprises 140 units. Three two-bedroom units have changed hands at an average price of $1.6 million so far this year, and monthly rents average $3,628, based on 28 rental contracts. This implies a gross rental yield of 2.7%.
The Cascadia was completed in 2010 and comprises 536 units
The Cascadia is a freehold condo located on Bukit Timah Road and within walking distance of the King Albert Park MRT station. Completed in 2010, it comprises 536 units. There have been 38 rental contracts for two-bedroom units so far this year, with monthly rents averaging $3,525. Based on the average price of $1.9 million for the six two-bedroom units sold this year, the implied gross rental yield is 2.2%.
Outside Central Region
The Woodgrove is located in Woodlands and comprises 72 leasehold units that were completed in 1998. So far this year, four two-bedroom units have changed hands at an average price south of $700,000. Despite the modest average monthly rent of $2,231, based on eight rental contracts, the implied gross rental yield is an attractive 4.0%.
The implied gross rental yield for two-bedroom units at Caspian is 3.8%
Caspian is located on Boon Lay Way, close to the Lakeside MRT station. Completed in 2012, the leasehold development comprises 712 units. Four two-bedroom units have been sold at an average price of $1 million so far this year, while monthly rents average $3,227, based on 66 rental contracts. This implies a gross rental yield of 3.8%.
The Centris is a 610-unit leasehold development completed in 2009. It is located beside the Boon Lay Bus Interchange, Boon Lay MRT station and Jurong Point mall. So far this year, 11 two-bedroom units have changed hands at an average price of $1.3 million. Based on 82 rental contracts, monthly rents average $3,591 for two-bedroom units, which implies a gross rental yield of 3.3%.
The average transacted price for two-bedroom units at Lakeholmz is $1.2 million
Lakeholmz is a 369-unit condo located beside Caspian and within walking distance of the Lakeside MRT station. The leasehold condo was completed in 2005. Nine two-bedroom units have changed hands so far this year at an average price of $1.2 million, while there have been 15 rental contracts with monthly rents averaging $3,093. Based on this, the implied gross rental yield is 3.2%.
Located adjacent to the Hillview MRT station, Glendale Park is a freehold condo that was completed in 2000 and comprises 448 units. The average resale price for two-bedroom units so far this year is $1.2 million, based on nine resale transactions. Monthly rents average $2,511, based on 15 rental contracts. This implies a gross rental yield of 2.5%.
This article appeared in The Edge Property Pullout, Issue 752 (Oct 31, 2016) of The Edge Singapore.