SINGAPORE - Recently a friend posed this interesting question: If the residential market is so hot, why did she have to slash her rent to get a tenant?
If she had owned a run-down apartment in an undesirable neighbourhood her predicament would have been understandable.
But her apartment is in a posh condominium within a stone's throw of landmarks such as St Regis Hotel and Tanglin Mall, high up in the sky with a panoramic view of the city.
Her previous tenant - a hedge fund manager - had terminated the lease prematurely after losing his job.
The flat was vacant for two months, and she finally had to slash the rent by 25per cent to get a tenant.
It sums up the dilemma faced by owners of upmarket condos.
On paper, their investments look good because they appear to have appreciated sharply, but they are not getting much by way of returns in the form of rent because the pool of high-flying tenants appears to be drying up.
Two years ago, landlords could call the shots and pick and choose tenants.
The economy had experienced a V-shaped recovery after the global financial crisis and large numbers of expatriates were flocking to work in our financial centre.
But since then, the pool of tenants has shrunk: The job market for high-paid expatriates has slowed while competition has intensified, given the number of new residential projects that have been completed.
Urban Redevelopment Authority (URA) data bears this out.
In 2010, private housing rentals jumped by 17.9per cent, but last year they went up just 3.8per cent, while a record number of leases - 41,573 - were signed.
Rents in most locations this year look like they will hold up at best at last year's levels, according to URA numbers for for the first nine months.
The only exception appears to be Geylang.
This has become more popular among tenants as they flock to lease cheap shoe-box units, with floor areas of 500 sq ft or less.
That means desperate owners of upmarket condos like my friend will have to settle for less in order to get some rental income to service their mortgage.
And the going may get tougher.
Sure, bad news such as UBS' announcement that it is cutting 10,000 jobs has cast a pall over other international financial centres like London, where the global lender has vast operations, as it may herald a growing trend of financial service cut-backs.
But landlords in Singapore could feel the pinch if the blood-letting occurs here.
In recent years, loads of investment bankers have relocated to Singapore from London and New York, as global lenders sniff more business opportunities amid a regional boom.
The saving grace is that the chill of a falling rental market is only being felt in the upmarket condo segment - so far at least.
Landlords with mass market condos are having few difficulties renting out units as tenants downsize to more affordable apartments.
On the supply side, there seems to be no end to the horror scenarios painted by dour analysts citing the number of homes due for completion that could put further pressure on rents if the pool of high-flying tenants keeps shrinking.
A recent Nomura report, for example, flags that the number of newly completed homes next year may hit 42,309, including the 24,551 HDB flats being built by the Government.
This compares with the 21,859 units completed this year and the average annual housing demand of just under 20,000 units since 2001.
The Straits Times reported that high-end developments such as The Marq on Paterson Hill and Hilltops in Cairnhill Circle have been completed for at least a year but still have numerous units unsold.
Still, there is a valuable lesson here for investors who believe that buying a residential property is a sure ticket to riches.
Sure, mortgage rates are at rock-bottom, which makes financing a condo a breeze.
But that is only part of the story.
Unless you plan to occupy the flat yourself, getting a tenant may not be as simple as you think.
It is just as well that the Government's October cooling measures were aimed at stopping buyers from over-extending themselves.
Home loans have been capped at a tenure of 35 years, while those taking a loan of more than 30 years, or taking loans that extend past the retirement age of 65, will have to fork out more in cash.
This will weed out the property investors least able to cope financially if they have only the rental income to rely on to pay the mortgage if a slowdown hits.
Just like quicksand, getting into a property investment may be much easier than getting out of it.