Updated: 01/17/2014 20:39

Rental yield of non-landed private properties fell to below 4% last year



Rental yield of non-landed private properties fell to below 4% last year

The Singapore Real Estate Exchange, SRX, says rental yields for non-landed private properties have fallen to its lowest point since 2006. 

It said rental yields fell to 3.9 per cent over the last year from 4.2 per cent in 2012. 

This represents a 7.1 per cent fall in yield from 2012 and a 31.6 per cent decline since its peak of 5.7 per cent in 2008. 

Four per cent is the psychological threshold when it comes to rental yields, says SRX Co-founder and Chief Technology Officer Jeremy Lee. 

SLP International's Nicholas Mak said in the past two years, low interest rates have increased the willingness of some property investors to accept lower rental yields. 

SRX says of the 34 planning areas, 31 experienced a weakening. 

Prime areas including Orchard, Tanglin, Sentosa Cove and New experienced rental yields of less than 3 per cent. 

But Outram, Downtown Core and the Southern Islands bucked the trend with their rental yields increasing. 

Mr Mak says a possible reason for this is that they're at the city fringe and there was limited new supply of completed private housing units in these areas last year.

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