: URAOriginal article:Despite a modest rebound in private housing rents in 4Q2024, which saw a 0.2% increase quarter-on-quarter, landlords can expect rental growth to remain stagnant this year, as reported by Savills Singapore.The underwhelming performance of the non-landed private residential market in the first three quarters of 2024 largely contributed to the 1.7% decline in rents for the entire year. This marks the first full-year decrease since 2020, when the leasing market saw a 0.5% year-on-year drop.There were 19,733 leasing transactions in 4Q2024, representing a 24.2% drop from the previous quarter. According to Savills, this decline can be attributed to a decrease in net new rental demand, as well as a decrease in employment pass (EP) and S pass holders in 2024, combined with a seasonal lull in rental activity at the end of the year.Read also: Retail rents at Orchard Road rise by 2.3% year-on-year in 4Q2024: Savills The firm noted that the majority of the decline in leasing activity last quarter originated from a 30.8% dip in landed home rental contracts across the island. Leasing volumes for apartments and condos saw a 23.7% decrease quarter-on-quarter in the same period.“Despite the decrease in leasing activity in 4Q2024, there is still some growth in rental demand. Additionally, rents in the private residential market have stabilized,” said George Tan, managing director of Livethere Residential at Savills Singapore.He also added that more reasonably priced rentals can be found in suburban areas, giving tenants the opportunity to prioritize options such as larger units, access to MRT stations, malls, and recreational activities.According to rental data compiled by Savills, the development with the most number of condo leasing deals in 4Q2024 was Parc Esta, a 1,399-unit project in District 14, which recorded 163 rental transactions at a median rent of $6.84 per square foot per month (psf pm).Other developments that saw high numbers of rental transactions include Marina One Residences (126 transactions at $6.62 psf pm), The Sail @ Marina Bay (126 transactions at $6.72 psf pm), Normanton Park (120 transactions at $6.26 psf pm), and D’Leedon (107 transactions at $5.43 psf pm).The Outside Central Region (OCR) was the only region last quarter to see a decline in average rents, by 0.8% quarter-on-quarter. In contrast, rents in the Core Central Region (CCR) and Rest of Central Region (RCR) grew by 0.9% and 0.3% quarter-on-quarter respectively.Read also: Investment sales volume to rise 35.4% year-on-year in 2024; May ease in 2025: Savills Savills also stated that the decrease in rent prices in OCR was likely caused by more tenants in suburban locations relocating to more central neighbourhoods, due to the more reasonable rental prices.Based on a basket of luxury properties tracked by Savills, the average monthly rent of high-end condos increased by 1.7% quarter-on-quarter in 4Q2024, to $5.85 psf pm. This suggests a potential slight rebound in the luxury rental market following a consistent decline over the previous five quarters.Looking ahead, landlords may face headwinds in the rental market as companies continue to cut staff and hire fewer expatriates, according to Alan Cheong, executive director of research and consultancy at Savills Singapore. He also added that landlords will have to face higher property taxes for non-owner-occupied residential properties, as well as increased conservancy charges due to rising inflationary pressures.However, the relatively limited supply of large luxury properties in the rental market may help landlords resist “underpriced” rental offers, Cheong noted. “Although rents for non-landed private residential properties turned the corner in 3Q2024 and continued rising in 4Q2024, we anticipate challenges in the rental market in 2025.”In the future, the widespread adoption of AI could potentially cut down on overall manpower requirements for certain high-tech firms, which may lead to a continued reduction in the hiring of white-collar professionals. This could also result in a decrease in the pool of expat tenants in Singapore, according to Cheong.“The saving grace for the rental market is that there are fewer new completions of private homes expected in 2025,” he said. The higher property taxes on investment properties may also deter landlords from accepting offers below market rates. He also expects interest rates to likely take longer to fall, which would result in mortgage payments staying at current levels for a longer period of time.Read also: GLS sites at Holland Plain and River Valley Green (Parcel C) open for application
The rental market for private housing saw a modest rebound in 4Q2024, with rents increasing by 0.2% quarter-on-quarter in the last three months of the year. However, according to a report by Savills Singapore, landlords should anticipate flat rental growth this year.
The lacklustre performance of the non-landed private residential market in the first three quarters of 2024 contributed to a year-on-year decline of 1.7%. This marks the first decline since a decrease of 0.5% in 2020.
There were 19,733 leasing transactions in 4Q2024, down 24.2% from the previous quarter, likely due to a decrease in net new rental demand as well as a decline in employment pass (EP) and S pass holders last year, coupled with a seasonal lull in rental activity at the end of the year.
The decline in leasing activity in 4Q2024 was largely driven by a 30.8% quarter-on-quarter drop in rental contracts for landed homes islandwide. Leasing volumes for apartments and condos also saw a 23.7% decrease over the same period.
“Despite the decrease in leasing activity in 4Q2024, there is still some growth in rental demand. Furthermore, rents in the private residential market have also stabilized,” says George Tan, managing director of Savills Singapore’s Livethere Residential division.
He adds that the suburban areas offer more affordable rents, allowing tenants to prioritize lifestyle options such as spacious units, connectivity to MRT stations, malls, and recreational activities.
Read also: Tourism recovery pushes Orchard Road retail rents up 2.3% year-on-year in 4Q2024: Savills
According to Savills’ rental data, Parc Esta, a 1,399-unit development in District 14, recorded the highest number of condo leasing deals in 4Q2024. The project saw 163 rental transactions at a median rent of $6.84 per square foot (psf) per month.
Other developments with high numbers of rental transactions include Marina One Residences (126 transactions at $6.62 psf), The Sail @ Marina Bay (126 transactions at $6.72 psf), Normanton Park (120 transactions at $6.26 psf), and D’Leedon (107 transactions at $5.43 psf).
In terms of rental price growth, only the Outside Central Region (OCR) saw a decline in average rents last quarter, by 0.8% quarter-on-quarter. In contrast, rents in the Core Central Region (CCR) and Rest of Central Region (RCR) saw increases of 0.9% and 0.3% quarter-on-quarter respectively.
Read also: Investment sales volume up 35.4% year-on-year in 2024; May ease in 2025: Savills
Investing in condominiums in Singapore requires careful consideration of the government’s property cooling measures. In an effort to maintain a stable real estate market and prevent speculative buying, the Singaporean government has implemented several measures over the years. These measures include the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. While these measures may affect the immediate profitability of condo investments, they also promote long-term stability in the market, making it a secure environment for investments. For more information on Singapore Projects, please visit our website.
Savills notes that the OCR’s decrease in rental prices may be due to more tenants in suburban locations relocating to more central neighbourhoods, driven by more reasonable rents.
Based on a basket of luxury properties tracked by Savills, the average monthly rent of high-end condos saw a 1.7% quarter-on-quarter increase in 4Q2024, to $5.85 psf pm. This suggests a potential rebound in the luxury rental market after a consistent decline over the previous five quarters.
Looking ahead, landlords may face headwinds in the rental market as companies continue to cut staff and hire fewer expatriates, according to Alan Cheong, executive director of research and consultancy at Savills Singapore. He also added that landlords will have to face higher property taxes for non-owner-occupied residential properties, as well as increased conservancy charges due to rising inflationary pressures.
However, the relative scarcity of large luxury properties on the rental market may help landlords resist “underpriced” rental offers, according to Cheong, who adds: “Although rents for non-landed private residential properties turned the corner in 3Q2024 and continued to rise in 4Q2024, we anticipate challenges in the rental market in 2025.”
In the future, the widespread adoption of AI could potentially reduce overall manpower requirements for certain high-tech companies, leading to a continued reduction in the hiring of white-collar professionals and potentially decreasing the pool of expat tenants in Singapore, says Cheong.
“The saving grace for the rental market is that there are fewer new completions of private homes expected in 2025,” he said, adding that higher property taxes on investment properties may also deter landlords from accepting offers below market rates. He also expects interest rates to likely take longer to fall, resulting in mortgage payments remaining at current levels for a longer period of time.
Read also: GLS sites at Holland Plain and River Valley Green