Renting out your private condo apartment

Many property owners here rely on property rental to help them with their mortgages and oftentimes, the rental option is regarded as a long-term financial aid. What then should you as a home owner who is looking to rent out your private property or even just a room in your home be watching out for? And as a tenant, do you know what you should or should not do?

DuchessResidencePublic housing or HDB flats fall under the jurisdiction of the Housing Development Board (HDB), which has clear rules and guidelines for property leasing. But private properties are often left to the discretion of the market, tenants and landlords, with some areas which though seemingly grey, should be quite glaringly clear.

What is not allowed?

  • Short-term rentals. Though concepts such as Airbnb have been around for sometime, it sadly may not yet work within Singapore’s legislative system for property rentals. URA’s lease and subletting rules currently states that rentals need to fulfil certain requirements, with the time period being a minimum of 6 months.
  • Partitioning of a unit into smaller units. It is not uncommon to find landlords or sometimes a master tenant putting up false walls or partitions in order to sublet the unit.  The maximum number of residents in a private residential property is 8, regardless of the size of the property.
  • Leasing to tenants without proper papers. Landlords should always make it a point to check and keep a copy of the tenants’ passport and work permits or employment passes as the onus is on the owner of the unit to ensure that the unit is rented only to legal workers. A quick check on the ICA website will allow you to verify your tenants’ validity and authenticity.
  • Subletting of properties by master tenants. As landlords of a property, always be vigilant and do frequent checks on your property to ensure the clauses in your tenancy agreements are not flouted.

And for tenants, be aware that your landlord should pay for the condominium’s maintenance fees. For both sides, a reliable agent who will be able to advise and help you with the proper paperwork and help your keep a lookout for blind spots is an invaluable asset.



Rising competition in the Rental market

If you were looking to buy a condominium unit to call home, competition from the rising number of new homes might be good news for you. But if you were looking to invest in a unit to reap rental profits, it might be wise to consider your options carefully.

Jupiter18 CondoThe rental market for suburban condominiums has been falling, especially as more new properties enter the market. Private condominium rentals have fallen 0.6 per cent last month and is 6 per cent lower than last May on a year-on-year comparison. More new condominiums will receive their TOP (temporary occupation permits) in the next few months, which may suppress the rental market even more. Property analysts are expecting a fall of up to 7 per cent for the private property rental market this year.

The effects may also trickle down to the HDB rental market as competition heats up across the board. The price gap may be narrowing between HDB and private apartment rents, thus giving tenants a much wider pool of options. A five-bedroom HDB flat now usually rents for up to $2,400 per month while a 2-bedder private condo unit rents at just under $3,000.

Location is still king and units in mature estates or near MRT stations will still command slightly higher rents.

Private condominium rental – Volume up, prices down.

Despite a softening of the private property market across the board, private condominium rental demand seemed to have remained steady, especially at popular projects in close proximity to transport and in areas with a low supply of similar new properties.

At Reflections at Keppel Bay for example, 314 more leases were signed last year as compared to 293 in 2013. But rental prices dipped 6.6 per cent as landlords may have been forced by competition to lower their asking prices. Average monthly rental here was $4.85 sf. Nearby, at the Caribbean at Keppel Bay, average monthly rent dipped by $0.43 psf from the previous $5.63 psf.

Reflections at Keppel Bay boasts waterfront living with a marina and a good many luxury amenities as well.

Reflections at Keppel Bay boasts waterfront living with a marina and a good many luxury amenities as well.

The tipping scale may now be leaning towards tenants as the influx of new properties, and in larger residential properties, many landlords may be competing against one another for the same audience. And once rental begins to dip across the island, tenants have an upper hand at bargaining for reduced rent and landlords often find themselves having to adjust prices to seal a deal.

Properties with a prime location and fewer competing units in the vicinity may still be in high demand, though City Square Residences at Kitchner Link seems to be losing its popularity with tenants despite its proximity to City Square Mall and Farrer Park MRT Station.

As more new properties reach their occupation-ready status this year, and coupled with the rising interest rates, it may be a slow but arduous journey for the market. What can property owners and landlords do to steel themselves for the year ahead?

Shoebox apartments falling out of favor?

These tiny but self-sufficient apartments have been doing exceedingly well for the last five years, and many investments favored these smaller units as their total quantum is more affordable than the larger ones and are easier to find tenants for. But as developers caught on and began building more of the same units, the number of shoebox apartments, or units below 500 sq ft, rose in number. By 2015, 53,900 new private condominium units will hit the market, and most of them will be shoebox apartments.

Alexis @ Alexandra CondoAccording to URA figures, there are currently 2,400 such units in the market. By end of 2015, there will be 11,000. That is almost five times the numnber. Will this dilute the market of potentla buyers? No doubt. But landlords with units in highly accessible locations may find themselves having the upper hand. Others who own units further away from transport nodes, town centers may find it harder to secure rental rates which they had hoped for.

However current rental yields for shoebox apartments remain 1 to 2 per cent higher than other types of units, which are 2 to 3 per cent. Private properties with such units include Alexis in Alexandra road, Parc Imperial in Pasir Panjang and Suites@Guillemard.

Property analysts still see some brightness in this market as singles, young couples and expatriates with smaller housing allowances continue to lean towards these smaller, more affordable units.

Kovan and Dual-key apartments – A Perfect Match

Dual-key apartments were a relatively new property type just a couple of years ago, but now, they are all the rage, especially with big families and property investors who are looking for prime property to rent out. And the latter could have found their perfect match with dual-key properties.

Trilive KovanThese dual-key apartments are unique for its 2 entrances within one unit. And this helps investors rent out the same unit they live in, while still keeping their privacy, all the while avoiding the ABSD (additional buyers’ stamp duty). If you own more than 1 property, subsequent properties will mean higher taxes and duties.

Developers are quickly picking up on buyers’ keen response to dual-key apartments and are including more of them in new launches. A new condominium development, Trilive in Kovan, will feature 88 dual-key units , that’s almost 80% of its total 124 units. To be launched later this year in June, dual-key units will start from its 614 sq ft two-bedders. Prices have yet to be released but are expected to be similar to that of the nearby The Tembusu, at $1,400 to $1,500 psf.

Kovan is an up and coming area for high rental take-up rates as rents there are relatively affordable for its convenient location and surrounding amenities. It has one of the highest rental yields in Singapore. It’s proximity to areas such as Hougang and Serangoon also means it is close to a number of schools, various modes of transport and just a few stops away from the city center.

The road ahead for the property market could be spiced up with the introduction of more dual-key units in future launches. Buyers will undoubtedly be interested to see how these new properties provide an edge up from what is currently in the markets.

Private home sales – Will the decline continue?

The property market has been softening. The decline seemed inevitable, especially as completed new private homes flood the market in the upcoming year or two.

Not surprisingly, shoebox apartments saw the largest dip in sales as the number of units are somewhat saturated. Buying power is also now lower and buyers who were initially looking at these units for investment may no longer be able to get the loans they need.


Marina One residential project with 1,042 new condominium units. Photo by

Marina One residential project with 1,042 new condominium units. Photo by

Rental issues such as the age, functionality and location of resale units now have to compete with the newer and sometimes faster property models. In the central districts, the decline in rents and sales of apartments were most evident. This could be due to the number of unsold high-end properties in these areas. Even suburban condominiums are feeling the heat as many expatriates shun them as they often do not provide the convenience and exclusivity they desire.

Whether the effect will transfer to the HDB resale market also awaits to be seen. As HDB upgraders who are moving to their completed units will have to let go of their HDB units within a specified time period, many may be in a hurry to let go of their units and possibly at lower prices than before as the market gets competitive. Pair this up with a diminishing market for smaller units as singles are now able to purchase new flats from HDB directly, as well as a smaller pool of permanent residents, the property market seems to be in for quite the turn this year.

Even as more new property launches are promised, how private home sales fare the next quarter may set the mood for the rest of the year.

DUO Residences rise up

With its prime location, DUO Residences is hitting all the high notes to the tune of an average $1. 994 psf. And bringing along with it, tons of potential investors to the Bugis area. Already 87% of its 660 units have been sold since its launch earlier this month.

DUO ResidencesIts completion is targeted for 2017, just three years away from now, and with the Central Business District (CBD) and Orchard Road shopping belt just a few MRT or bus stops away, it joins the ranks of properties in the fringes of the city centre commanding high prices. At the 360-unit Concourse Skyline for example, prices hovered between $ 2, 279 to $ 2, 830 psf. This is close at the heels of the top-selling mixed-use development, Southbank on North Bridge Road.

If you have travelled past the Bugis and Rochor areas of late, you would have noticed the major changes in the landscape, both horizontally and vertically, as it prepares itself for the new Downtown Line MRT stations and new residential and commercial properties. Rental potential is incredibly promising as there are not yet as many completed condominiums or private properties available in the area as compared to other city fringe districts. With its heritage and other artistic and entertainment centres nearby, not to mention schools such as the Nanyang Academy of Fine Arts and School of the Arts, the Bugis area seems set to be abuzz with activity.

Besides the usual Novena, Newton and Geylang city fringe districts, Bugis seems to be hitting the bulls eye with investors. Are you ready to grab a piece of the pie? What other considerations should you be weighing?

Luxury Apartment prices broke $5, 000 psf

But property analysts are not bringing out the champagne yet.

Although selling prices for luxury condo apartments have broken the $5, 000 psf record, it may not yet be significant enough to indicate a rebound of the previously lacklustre luxury apartment sector. The lack of interest from potential buyers, renters and investors have signaled a continuing weak top-end property market. Low leasing demand may be the main reason for the lull.

Hamilton Scotts

Hamilton Scotts

In view of the volatile and somewhat fragile global economy, companies which hire expatriates are more cautious about providing generous housing allowances. In addition, senior expatriates are increasingly more willing to cut frills and opt for less spacious, more functional properties. These same companies may also have cut back on the number of expatriates offered relocation packages.

TwentyOne Angullia Park. Photo by China Sonangol.

TwentyOne Angullia Park. Photo by China Sonangol.

The properties which went for more than $5, 000 psf? The first was a 2,756 sq ft unit at the Hamilton Scotts apartments at the edge of Orchard Road. The unit went for $13.8 million at $5,001 psf. Considering most units were going only at $3, 401 psf prior to January’s cooling measures, a $5, 001 psf selling price meant kudos to the developers.

Further into the heart of Orchard, the freehold TwentyOne Angullia Park sold not one, but two units above the $5, 000 psf mark. One went for $5, 099 psf and the other at $5, 5600 psf in May. Prior to this year’s top high-end apartment sellers, the last apartment unit which sold above the $5, 000 psf mark was one at the Skyline @ Orchard Boulevard in September 2012. After that, prices had hovered around $4, 000 psf.

It will be a real feat to keep the high prices going, and if they do, what does that mean for Singapore’s real estate sector? How does that affect the average Singaporean?