With the recent focus on rental prices in the market, a lot more has been happening. Other than renting tenants and landlords, participants in the sales and purchases market should also note the issues regarding rental. Today, we seek to educate and share about what we notice in the rental market in Singapore.
Rental Scams
The first issue to discuss is related to scams, rental-related scams has been on the rise and has been given more attention in the mainstream news and media. The desperateness of tenants in seeking out rental alongside advances in technological communications methods have created a ripe market for scheming scammers.
Thus, we hope to raise more awareness and highlight the things to note regarding the possibilities of encountering rental scams.
Some signs that a rental scam is likely:
Units with rental prices that is very cheap and below the market
Communication on websites that are not as trustworthy, especially if they are not specific to property related ads.
Providing "proof" of videos and photos of the unit, NRIC of owners, ID tag of agents which are unverified.
Scams are comprehensive, so it's important to note that showing videos and photos are not enough as proof that the renting agent or landlord is legitimate, so please do not transfer any money just based on some whatsapp correspondence!
Personal true story from Aaron A lady came across a cheap rental unit and had some correspondence with the supposed 'agent' renting this unit and wanted to check out this unit in person. However it's owned by someone who has only bought for 1 year and is not renting out. The agent was called and he confirmed that his name and identify has repeatedly been used for scams despite previous police reports.
Scams are true and happening a lot!
Advice:
Do not send money without first viewing the unit
Do not send money without ownership proof
Be wary when the other party is trying to create urgency by saying the unit will be snapped up
Tenants are feeling desperate, and even state that they are open to renting without viewing and just asking for a video. This behaviour actually opens up possibilities for scams. Viewing is important for preventing this scam as well as preventing any misunderstanding. Overall, people have a higher likelihood of being scammed when desperate and lose their usual judgement.
Agent Commissions
There are also situations where prospective tenants approach an agent representing a landlord to enquire about a unit, but are told that they need to pay a commission. This is a situation that is hard to understand.
When we see an agent advertising a unit, it's obvious that he/she is acting on behalf of the landlord and thus it should be understood that tenants should not need to pay commissions to agent.
This shows a real conflict of interest if the agent is to act for both the landlord and then the tenant, whose real benefits would the agent be acting for? Details on whether this is actually allowed or not should be clarified with CEA.
Reality of rental market
The reality of today's rental market is one that overall has low supply with high demand. To illustrate this level of demand, we showcase two examples below.
Examples:
2 bedroom unit.
2 days - 100 over calls
1 night viewing - 30 groups of tenant
old condo - 3 bedroom unit
40-50 calls
20+ viewings
These numbers show a strong demand in the rental market and this would then implicate what the landlord expectations are and what the tenants would need to face.
Rental prices going up
With the low supply and high demand, it's obvious that rental prices are skyrocketing. Some factors fueling this price increase are:
Projects are still in the midst of completion, keys collection next year. People are waiting for their units to be ready.
People are looking to for 1 year lease, renting for the short term, thus the rentals are increasing.
Foreigners on employment pass who are here to work, they will not buy and just look to rent.
Discrimination in the rental market?
Firstly, agents bear the brunt of the displeasure when the issue of discrimination or dubious practices in the market are discussed. It's important to understand that the job as an agent has the implicit responsibility of getting the highest price for the landlord based on landlord requirements.
Whenever a tenant messages the agent, if the situation does not meet what the landlord wants, the agent has to abide to the landlord's requirements. When faced with such rejections or price-related pushbacks from agents, there is a tendency for prospective tenants to throw up phrases like 'unfair', 'unethical' and more.
Thinking in the shoes of the landlord, the landlord wants the highest prices and also the right to 'choose' the tenant in consideration of the expected care of the unit, wear and tear issues and more.
Behavior of prospective tenants that agents have to deal with include asking for special accommodation for viewing timings as well as showing displeasure when rejected by agents and landlords. It's a tough market certainly, however, a bit of understanding would go a long way.
There is a high demand for enquiries and viewings and thus it's hard to accommodate special individual requests from prospective tenants especially in such a market. It's the reality of the market, so understanding the situation as it is will help everyone feel better when dealing in the market.
Summary of issues
In the rental market, we see issues of rental scams, agents comms, rental prices increasing, cooling measures all affecting the interactions in the market.
With the reality of the rental market today, tenants and landlords need to be aware and grasp a good understanding of the situation to be fair to both tenants and landlords. Landlords are definitely able to choose, as seen with every unit with 20-30 viewings having 5-6 offers for the landlords to choose from.
It's most important for tenants to watch out for rental scams and we hope our sharing has helped to shed some light on the rental market today in Singapore.
Watch Aaron get down to business in sharing the key issues in the rental market today!
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