Condo rent increases likely to taper off this year
The increase in home rents is now slowing down according to analysts and property agents. Tenants are now resisting increases, and landlords are reluctant to lower the prices amid the rising costs.
Many agents are also experiencing fewer enquiries from potential tenants for rentals this year.
“The main reason is probably because there are a lot of new condos that have already been completed this year, and some more big ones that are scheduled to be completed in the second half of the year,” stated Jack Sheo, a PropNex agent
“We are seeing a situation where tenants have more choices,” he added.
More from OMY: More properties to be launched in 2023
According to estimates, condo rents increased by 3.5% in February. Rents have also increased 36.2% year on year
Property analysts say that this year, increases are likely to taper off. Analysts are also saying that the demand will likely settle over the year as more flats and condominiums enter the market.
Tenants waiting for the completion of their new BTO flats are also expected to drop out of the market soon.
Additionally, there’s a growing disparity between the expectations of tenants and landlords.
“Many landlords are holding firm to their asking rents while tenants are resisting rent hikes,” shared senior vice-president of research and analytics at OrangeTee & Tie Christine Sun.
With rents rising substantially over the past year, many tenants have become unwilling to pay more. In fact, a lot of people are thinking of simply buying their property.
“We want to buy a property now as the new rental is just too high to make financial sense for us, and we are looking for a bigger unit to bring my mum over to live with us,” stated renter Steven Chung.
This conflict is expected to lead to relief in the second half of 2023.
“On the supply side, about 18,000 new private residential units, most of which are non-landed, are expected to be completed this year. Together they should help to reduce the rental pressure,” said Savill’s executive director of research Alan Cheong.
“However, even if rents were to correct, it could be mild and not likely to retrace in any significant manner the rise which has taken place since 2021,” he added
More from OMY: BTO vs Resale Flats: Which Is Better?