Rents for housing are expected to fall by 3% in Q3
According to PropertyGuru, the total rental supply rose 11.3% in Q3.
This caused the overall asking rents to fall by 2,5% from Q2, marking the second straight quarter with a contraction.
Rents have fallen as a result. Now that land borders have been reopened, Malaysian workers no longer need temporary housing. The number of Malaysian households moving to their new homes is increasing as more homes get completed.
This comes after a surge of private houses being built in the previous quarters.
In Q2, temporary occupation permits were issued for several projects. The Woodleigh Residences, Affinity Serangoon and Riverfront Residences all have 667 units. With completions in the 1st quarter, there’s enough supply to meet current demand.
In addition, in Q3, approximately 9,000 private residential homes, excluding the executive condos, have been completed. This was the highest number of completions for a quarter since Q2 2016. The total number completed units for 2023’s first three quarters is now 17,199. It is three times higher than the 2022 period.
In 2018, the number of homes completed is expected to increase by about 20%, making it the biggest year-to-date.
Rental rates for residential properties should continue to drop, after already dipping in the third-quarter as demand slowed down and more houses were completed to add supply.
PropertyGuru released its market report for Q3 on Thursday (Nov.16). It showed that the rental rate, which is based on inquiries of all rental listings in their portal, had dropped 10.4% on a quarter over quarter basis.
These landlords have adjusted to a decrease in the demand in these areas, which is significant compared to last year.
According to latest government data, overall transacted rental prices for residential properties rose by just 0.8% during Q3, less than the 2.8% growth in the prior quarter.
Rents for non landed properties increased by only 0.2 percent, compared to the previous quarter’s increase of 2.3 percent. Rentals on landed properties were down 4.4 percent in Q3, following a 6.7 percent increase in the previous quarter.
PropertyGuru measures that the rental demand for public housing decreased 14.7% between Q3 and Q3, whereas rental supply increased 7.8%. The asking rents on HDB (Housing and Development Board) flats have risen by 3.5 % over the period.
The rising costs of renting private properties have led tenants to seek out more affordable HDB housing options.
Renters of HDB apartments or rooms have less financial pressure on them to reduce the rent. This could be because their loan amounts are smaller or they’re less affected when it comes to rising interest rates.
The private non-landed real estate market has peaked. In Q3 the asking rents fell by 4 percent compared to previous quarters.
The completion of another 8,959 apartments is predicted for 2024. Rents should be softer as supply increases and the pressure of domestic demand is eased.
In terms of property types, the most significant decline was recorded in the landed segment. Rents were down 7.6 % in Q3 when compared with the second. PropertyGuru’s figures showed that non-landed rents decreased by four percent.
Orchard Road, Eunos/Paya Lebar and the surrounding areas are all experiencing a marked decrease in asking rents.
The portal’s statistics showed that the median rents in Eunos/Payar lebar and Orchard decreased by about 6 percent from October to October of last year.