Chart of the Day: See how EP holders affect lease deals

There was an earlier 8.2% rise in lease transactions.

Savills Research reported:

With the latest Ministry of Manpower statistics showing that Employment Pass (EP) holders having declined by 700 between Dec-2011 and June-2012, the 8.2% rise in lease transactions for the first 3 quarters of this year to 37,668, must appear puzzling.

There are some reasons behind this.

1. One is that the statistics are gross numbers, capturing both new leases and renewals. Also, the statistics also capture leases that broke before their due date and were subsequently re-let by the landlord. Given that a standard tenancy agreement is for two years, we have to revisit 2010 to find the size of the market. For that year, there was a net increase of 29,000 Employment Passes over 2009. If all these renewed in 2 years, it forms a strong base for 2012.
2. Increasingly, there are tenants, particularly those renewal cases, taking up short term leases less than the standard 2-year tenure. These could be as short as a few months. The re-letting of the premises would therefore add to the statistics.
3. Those at the least lower bound income limit for S-passes may spillover into private properties but on a multiple sharing basis.