Source : Straits Times - 15 Sep 2008
More expats, medical tourists and even locals seek interim homes; estates with collective sales delayed cater to demand
LIKE many property investors, Mr Jonathan Ho has a few apartments that he rents out for income.
But instead of the usual practice of leasing them out for a year or two at a stretch, he offers short-term stays of a few months, weeks, or even days - for about 20 per cent above the normal rate.
$4,400 A MONTH: rent for a two-bedroom apartment at Langston Ville in River Valley, for six months. This is 20 per cent higher than the average monthly rent in the development.
‘Demand is good. More foreigners and Singaporeans are looking for short-term leases now,’ said Mr Ho, a self-styled ‘property agent-cum-owner’ who also acts as a long-term leasing agent for other owners.
Once extremely rare, short-term leases of less than a year are gaining in popularity, thanks to higher demand from foreigners and a supply of temporary homes created by delayed collective sales.
While there are no official numbers, property agents say the market for temporary leases is perhaps 20 per cent bigger now than a few years ago.
Mr Eric Cheng, a veteran property investor and the senior managing director of property development and lifestyle group ECG Group of Companies, said he and his group own 11 apartments in central areas available for short-term leases ranging from three to six months.
$7,600 A MONTH: The minimum rent Far East Organisation is asking for month-long stays at a two-bedroom unit in Central Place, Hougang.
‘In the last two years, the demand for short-term leases has increased 15 to 20 per cent, judging from the increase in our revenues from that sector,’ he said.
This demand is coming from Singaporeans who are renovating their houses or are in between buying homes, as well as expats on short-term contracts and medical tourists who are here for treatment and need a place to stay for a few weeks.
At the same time, a new supply of interim rental homes has surfaced as a result of delayed collective sales. These estates, in limbo pending sale completions, could be largely empty for up to a year as their sellers move out to new homes.
Other landlords, like Mr Cheng, are capitalising on the demand for short-term leases to get higher rental income for their apartments.
This has helped spawn a specialised market of temporary apartment stays, with some property companies and agents now focusing more on this trade.
Just three years ago, temporary leases were ‘unheard of’, said Ms Maria Ali Koppe, a property agent with HSR Property Group, who now does a healthy trade in this market.
$3,800 A MONTH: rent at Devonshire Lodge near Somerset, for two-bedroom flats. Three-bedroom units go for $5,000 a month.
‘People didn’t want to rent their houses temporarily, they were scared the tenants might damage their furniture and houses,’ she said. Those in need of a temporary lease turned instead to serviced residences or to renting a room within a residential apartment.
But serviced residences, a short-term stay staple, are now near full occupancy, causing rates to rise and prompting tenants to look for cheaper alternatives.
On average, short-term tenants pay 20 to 30 per cent more per month for a short-term lease than the going rate for a normal year-long stay.
But this is still much cheaper than serviced apartments, which cost anything from about $350 to $600 a night. Far East Organization offers month-long stays starting at $7,600 for a two-bedroom unit at Central Place in Hougang.
For Mr Ho’s apartments in the prime districts, rents start at $90 a day or $600 a week. The properties in his arsenal include units in Kim Sia Court beside Lucky Plaza in Orchard Road, Spottiswoode Park in Outram and Parc Oasis in Jurong.
One of Mr Cheng’s units, a two-bedroom apartment at Langston Ville in River Valley, will soon be rented out to a Dutch expat for six months at $4,400 a month - 20 per cent higher than the average monthly rent in the development.
‘The tenant is used to a quieter neighbourhood but he wants to try living in the city area for six months before he decides where to stay more permanently,’ Mr Cheng said. ‘He doesn’t mind paying more for the flexibility of a short-term lease.’
Another of ECG’s units, at nearby Kim Yam Heights, is being rented to a Japanese company that renews the lease every three months as it brings in new expat employees here on short-term contracts.
The premiums that short-term tenants pay come with the benefits of immediate occupancy and fewer restrictions than a normal year-long contract, which requires tenants to return the homes to their landlords in their original condition, for instance.
Many short-term landlords also throw in frills such as cable TV, broadband Internet and coverage of utility bills.
The privacy of having a whole apartment to yourself particularly appeals to Thai expat Nang, 29, who is working on contract for a market research firm here.
‘I looked at renting rooms at first, but if I can have a small apartment, that is better,’ she said.
One unit she is considering is at Siglap Court, an old, rundown block of apartments in Siglap Road that has been entirely devoted to temporary rentals.
Property agents would not reveal the name of the development’s owner, but said the estate’s collective sale hit a snag and the owner has subdivided the units to lease out indefinitely for the future.
Tenants pay $1,500 to over $2,000 a month for units starting at about 500 sq ft. Most of the tenants are foreigners working in Singapore, agents said.
Other collective sale developments that have units available for stopgap leases include Horizon Towers in Leonie Hill, Oakswood Heights in Spottiswoode Park, Devonshire Lodge near Somerset, Killiney Apartments in Killiney Road and Minton Rise in Lorong Chuan.
At Devonshire Lodge, two-bedroom flats can be leased for $1,500 a week, or $3,800 a month. Three-bedroom units go for $5,000 a month. Tenants include Japanese, Russian and Saudi Arabian expats and medical tourists being treated at the nearby Mount Elizabeth Hospital, said an agent.
While most short-term tenants are foreigners, Singaporeans are also getting in on the action.
Ms Rachel Foo, a former air stewardess now looking for a new job, has leased an apartment at Avila Gardens in Pasir Ris for six months. Her rent: $2,000 a month, almost 20 per cent above the market rate of $1,700.
‘The rent is higher but at least I keep my options open, so if I find a job somewhere in town I can always move,’ she said. ‘I also want to know if I can get along with the neighbours before I commit to a long-term lease.’
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