Sunday, December 7, 2014
Is the Rental Market Slowing?
There appears to be a lot more vacancies in at least 2 of my apartments lately. Some people have been calling me to view my units and I found out they were already staying there. I asked them why they wanted to move, then came various answers... one wanted a bigger unit, one said owner is selling his apartment so he has to move and at least two were very direct - they wanted cheaper rent. But I suspect all of them, not just these two are shopping around for a better price and they may use the price to pressure their landlords into dropping their rent.
So how much cheaper? They are currently paying about RM3,000/month for their single bedroom units. They can opt for smaller studio units which are asking about RM2,500 to RM2,700 but when I asked what is their budget, they said RM2,000. So I had to apologize that I do not have any units to meet their budget. One of them said it's OK, he will be viewing a few units tomorrow offering that price. I said good luck.
They may be calling my bluff but I still think landlords are now competing for that small pool of tenants. There will always be desperate ones. The fact is, there will be even more condo units entering the market next year and this pool of tenants are not increasing. So, will holding power hold out till the situation recovers and rent goes back up again?
The short term rental market however is doing roaring business in this holiday period. Perhaps it is time to revisit this. For the short term serviced apartment 1 week to 1 month stays, Somerset in Bukit Ceylon is running over 90% occupancy since August and Invito opposite recently have to take down their promotional rate in order to cope with demand.