Condo rents up 3.2% in March

Limited supply of homes and surge in rental demand prompted landlords to raise rents.

Condo rent prices edged up 3.2% YoY and 0.2% MoM in March as all regions posted YoY increases, according to data from SRX. Rents are down 15% from its peak in January 2013.

The Rest of Central Region (RCR) led the YoY jump in rents at 4%, followed by the Outside Central Region (OCR) at 3% and Core Central Region at 2.4%. On a MoM basis, RCR and OCR rents rose by 0.3% and 0.8%, respectively, whilst CCR rents dipped by 0.8% in March.

“Due to the limited supply of completed homes and a sudden surge in rental demand, some landlords increased their asking prices. However, we have also observed that some landlords gave rebates or discounts to help their tenants whose livelihoods have been affected by Covid-19, which is a compassionate and caring gesture,” said Christine Sun, head of research & consultancy at OrangeTee & Tie.

A total of 5,244 units were rented in March, up 10.9% MoM and 7.6% higher than the five-year average volume for the month. However, the figure was 5.9% YoY lower compared to March 2019.

Breaking down by regions, OCR accounted for 40.6% of the volume. RCR comprised 32.6% of condo rental volume, whilst 26.8% came from CCR.

“Existing tenants could have chosen to renew their contracts as many were reluctant to scout for new dwellings to minimise their chances of getting the virus, whilst others who returned from overseas needed a place to complete their stay-home notice,” Sun said.

She also added that some Malaysian workers may have scrambled to rent a unit before the lockdown was imposed in their country. Some may have rushed to commit to a unit before the circuit breaker measures kicked-in.

Meanwhile, HDB rents rose 1.5% YoY despite the 0.5% MoM decline posted in March. SRX stated that rents are down 13.7% from its peak in August 2013.

“The public housing market has also seen a similar trend where volumes have increased last month, with possibly the same reasons cited for the private rental market. The increasing supply of HDB flats has probably outweighed the increased short-term demand for rental units, which may explain why rental prices decreased by 0.5% MoM,” Sun commented.

Three-room rents went up 1.6% YoY, four-room by 1.2%, five-room by 1.6% and executive by 0.9%. Mature estates and non-mature estates rents grew 1.4% and 1.7% YoY, respectively.

HDB volume dropped 11.3% YoY in March, but rose 15.4% MoM, from 1,869 units in February to 2,157 in March. By room types, 34.5% of total rental volume comes from three-room, 32.6% from four-room, 26.5% from five-room and 6.4% from executive.