Savills: Private residential rents at highest levels in 24 years

/ EdgeProp Singapore |
The interest rate hikes that is ongoing led to landlords increasing rents as their mortgage repayments are expected to increase concurrently, says Savills. (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - Rents of landed and non-landed residential properties recorded quarterly increases of 10.9% and 8.3% in 3Q2022. According to Savills Singapore, the rental index of these property types hit record levels in 24 years since the start of the URA time series in 4Q1998.
Notably, Savills highlights that the top two projects with the highest non-landed residential housing are newly completed projects in the Rest of Central Region (RCR). They are Stirling Residences and Park Colonial.
Using EdgeProp’s research tools, Stirling Residences has an average rent of $7.1 psf per month (pm), while Park Colonial has an average rent of $6.5 psf pm.
EdgeProp's property research tool - EDGEPROP SINGAPORE
On EdgeProp's property research tool, users can find details of a private residential development. (Picture: EdgeProp)
Savills notes that the monthly rental achieved at those two projects is comparable to those at prominent developments in the Core Central Region such as The Sail @ Marina Bay ($6.24) and Marina One Residences ($6.64).
Overall, residential leasing volume in 3Q2022 rose 20.5% q-o-q to a total of 25,382 transactions. This is the largest quarterly increase in leasing volume since 3Q2020 when rental transactions rose 34.6% q-o-q.
The interest rate hikes that is ongoing led to landlords increasing rents as their mortgage repayments are expected to increase concurrently, says Savills
The number of landed homes being leased out in 3Q2022 increased to 1,812 transactions, up from 1,228 transactions in 2Q2022. Meanwhile in the non-landed segment, Savills notes that were was a "sharp q-o-q increase" of 18.8% to 23,570 transactions last quarter.
“The surge in leasing volume of residential homes came with the return of foreign students and expatriates — as border restrictions and social distancing measures eased — coupled by locals seeking for temporary replacement homes and delays in completion of new homes,” says Savills.
The residential leasing market is expected to remain tight for the rest of the year, the consultancy says.
“Come 2023, the supply crunch in the rental market may ease and vacancy numbers may rise when 18,234 new private residential units are completed,” says Alan Cheong, executive director of Savills Research. “Rent increases may slow in 2023 as demand moderates and new supply comes online,” he says.
According to Cheong, “based on historical correlations, 2023 will be a crucial year to see if rents will correct because of the confluence of the economic cycle”.

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