Impact of Covid-19 on Singapore’s Home Rental Market
In conversation with the Sendhelper, Clarence Foo, Luxury Realtor and Real Estate Coach shares his views and expert opinion on the impact of Covid-19 on Singapore’s home rental market. He believes that despite the adverse effect of the pandemic, the real estate market will witness a gradual increase in demand in future.
1. What is the current status of residential housing demand in Singapore?
Ever since Singapore entered Phase 2 on 19 June 2020, we see tremendous uptake in demand in the residential housing sector. This is across all 4 categories, namely new launch condos, resale condos, landed houses and resale HDB flats. If it is just one category, it could be an outlier but with every category seeing increasing transaction volume, there is a clear trend of demand.
2. How has Covid-19 affected the rental market in particular? Can you share some numbers in terms of current demand versus pre-covid period?
In the various recent reports , it showed a drop in the number of EP & SP holders, with a reduction of about 22,000 pass holders. That said, there are still about 190,000 EP holders working in Singapore. SP holders are around 188,000. Personally, some of my own tenants had to leave Singapore. But at the same time, there are new tenants still coming to Singapore, albeit at a slower rate as compared to a normal year. The rental market is not a generic "big bucket" where every part of Singapore is the same. In some districts, rentals have actually gone up. Others have dropped.
3. With border restrictions in place due to Covid-19, how will Singapore address the potential demand deficiency?
The private residential market is an open free market. In that sense, the government doesn't intervene when it comes to rental demand, or lack thereof. In a free market, each landlord has to recognise there is competition from other condos/houses, or even within the same condo or HDB precinct. Then the landlord has to choose and work with a realtor who understands the market, who can help to market the unit in the most relevant and effective way.
4. Do you see further softening of rents? What is the general sentiment of landlords who are reliant on rental income?
Like what I shared earlier, the rental market is not a generic one. I've seen some rentals softening in some places, and I've also seen rentals increasing in others. Landlords are more open at this time to discuss rentals and furnishing, as long as the rental offer is a reasonable one.
5. As companies shift largely to work from home (WFH) or remote working practices, how is it going to impact tenant preferences?
WFH is here to stay and it will affect commercial rentals more than residential rentals. In fact, with WFH arrangements, I find that more people are paying more attention to their homes. Tenants want to look for bigger apartments that will give them more space.
6. With remote work now possible and not having to commute to the office daily, are people willing to stay far from their workplace now if rentals are cheaper?
When it comes to selection of location, proximity to the workplace is only one of the considerations. Many times, I find that tenants pay more attention to the surroundings of the property. Are there amenities? Is it easy to get groceries and food? Is there a park nearby? Where can they go for a run? So I don't see a trend of people moving further away to save rent, and lose out on the quality of life.
7. What should new tenants keep in mind while searching for a living space? Are there certain clauses in the rental agreement that they need to look out for and how can they negotiate a good deal during these unprecedented times?
In Singapore, the tenancy agreement itself is fairly transparent and clear. The perennial issue I see is when tenants prefer to go the "DIY" route and be unrepresented by a professional realtor. Increasingly I see disputes and unclear handover procedures, both at check-in and check-out. This results in an unnecessary acrimonious exit. More importantly, the eventual costs and deductions are far higher than engaging professional help in the first place.
8. What would you advise landlords feeling the heat of the volatile rental market? How can they stay positive in these trying circumstances?
I always tell my landlord clients that being a landlord is like being a business owner. As a business owner, we have to adapt to market conditions and improve our products. It sounds counterintuitive to spend money on the property in a downturn but successful brands do that. They know there are still customers who are willing to pay good money for a good product. Likewise for landlords, make your property the best option for tenants. It's not all doom and gloom. It's important to be patient and proactive.
For housing rental consultation, you may contact Clarence Foo here.
This article is published by Sendhelper. The views and opinions expressed in this article are those of the interviewee and not necessarily reflect the official position of Sendhelper.
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