Thursday, May 10, 2012

Rental yields steady in April

Straits Times: Thu, May 10
INVESTORS worried that the return on their residential investment properties might have taken a tumble can relax.

Rental yields held their ground last month as falling prices in the city centre and city fringe region and sustained rental demand propped up these returns.

Data from the Singapore Real Estate Exchange (SRX) found that overall yields for private non-landed homes was 4.06 per cent last month, easing slightly from the 4.23 per cent in the fourth quarter.

SRX calculated the yield by dividing the average per square foot rent over 12 months by the average psf price of units sold last month.

Suburban homes posted the best yields of 4.02 per cent, city fringe homes pulled in 4 per cent while city centre homes had the lowest yields of just 3.24 per cent.

A total of 2,174 leases were inked in April by agencies under SRX, which collates and displays transactions by major property agencies, accounting for about 85 per cent of resale transactions in the market.

Experts say yields are expected to hold at current levels in the short term. However, the sustained health of the rental market will depend on where the economy is headed, they add.

C&H Properties key executive officer Albert Lu said that the slight dip in rental yields last month does not indicate any sustained downward trend.

But if the global economy should take a sharp turn for the worse, leading to foreign workers leaving Singapore, then rental demand, and hence yields, could be aversely affected, he added...
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Martin Koh/ Sherry Tang
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