| The rental prices for the last quarter of 2008 had | | | | to the level of March to June 2007. |
| already dropped more than 5%. We expect the | | | | Would rental prices drop below 2006 rental prices? |
| rental prices for the 1st quarter to drop as well | | | | With the increase of population in Singapore, it is |
| given that most asking price from various condos | | | | difficult to predict that the rental price would drop |
| had already dropped over the period of January | | | | too much. However, there are several reasons |
| and February. Owners and agents have lowered | | | | that rental price can drop below 2006. |
| the asking price in order to have an opportunity | | | | 1. More private apartments are being rent out. It |
| to show potential prospects to view the | | | | can be because owners are facing cash flow |
| apartments. | | | | problem and renting out their homes would |
| Since 2008 3rd quarters, according to Knight | | | | increase their cash flow. And as more owners |
| Frank and URA report, island wide rentals had | | | | start to do so, there would be an increase supply |
| since fell for the first time ever since its rise. As | | | | of private property for rentals. As a result, the |
| more expatriates are leaving the country due to | | | | property rental prices would decrease as tenants |
| companies cost cutting or their budget for | | | | have more choices to choose from whereas |
| expatriates' homes decrease, the demand for | | | | landlords and agents have to lower their rental |
| rentals have decreased over the time. | | | | prices in order to attract the tenants. |
| Unemployment rates would also impact the whole | | | | 2. The population in Singapore decreases when |
| economy as well, which would affect the over | | | | foreign workers return to their home country or |
| aggregate demand for Singapore. | | | | when expatriates are sent back to their homes |
| Now, the tenants hold the bargaining power if | | | | due to the decrease in revenues of companies. |
| they can hold on longer as owners would lose | | | | 3. Developers are renting out their new |
| more if they choose not to take a lower rental | | | | developments to increase their cash flow. With |
| price. However, this does not apply to HDB rental | | | | the increase in the supply of houses for rentals, |
| as the demand for HDB rentals are still increasing. | | | | property rental prices would drop too. |
| As the rental price drops, the investments many | | | | 4. If more people are expecting the rental prices |
| people derive from property rentals decrease as | | | | to drop and delay their option of renting a new |
| well. To many, rentals investment of 3% can | | | | house, then the overall demand for rentals would |
| consider to be lucky in this financial crisis. | | | | drop too. A few tenants who are looking for new |
| As the property prices drop to the level before | | | | houses to move have been expecting the prices |
| 2004, it can be a good time for many of us to | | | | to fall again and have been waiting longer for the |
| start to invest in the property. At the end of | | | | rentals to drop further. |
| December 2008, rental prices had mostly return | | | | |