SINGAPORE, June 11 — Rentals for non-landed private homes in the Republic fell last month, dashing hopes that a market recovery was under way after the increase recorded in the previous month.

Flash estimates released by SRX Property yesterday showed that overall rents for non-landed private homes slipped 0.6 per cent in May from the previous month, reversing from the 0.1 per cent increase in April. Compared with May last year, last month’s rentals were 6 per cent lower.

Rental volume fell 3 per cent last month from April to an estimated 3,337 units. However, this was 6.2 per cent higher than in the same month last year.

“Rental data for last month was pessimistic. This puts initial projections of a market recovery into doubt ... The fall in rents could be because of higher competition for tenants due to more developments receiving their Temporary Occupation Permits,” said Mr Eugene Lim, key executive officer of property agency ERA.

Mr Nicholas Mak, executive director of research and consultancy at property firm SLP International, said it was not surprising that rentals fell, as new housing supply outpaced demand, especially in the Outside Central Region (OCR), or suburbs.

The broad market decline was led by the 1.5 per cent rental decrease in the OCR, followed by the 0.6 per cent slip registered in the Rest of Central Region (RCR), or city fringes, the SRX report showed. However, rents in the Core Central Region (CCR), or city centre, inched up 0.2 per cent.

“As rentals weaken, some tenants are able to find accommodation in better locations for the same amount of rent that they were previously paying. Therefore, there is a gradual ‘flight to quality’, where tenants may choose to move to better-located premises when their existing leases expire,” Mr Mak said. He added that this trend might support the rental market in the CCR and subsequently the RCR.

In the Housing and Development Board segment, overall rents were unchanged last month from April, but were 2.3 per cent lower than May last year, SRX data showed. Rental volume increased 1.6 per cent from April to an estimated 1,798 flats. This is also 3.6 per cent higher than the number of the units rented in May 2014. — TODAY