Economic challenges, new supply to drag private residential rents in H2
Savills observed that the pace of rent increase has slowed in Q1, at 7.2% QoQ.
Private residential rents are likely to follow in the second half of the year due to economic challenges coupled with a greater supply of new completions, Savills reported.
The real estate expert underscored that whilst rents continued to improve in Q1 (+7.2% QoQ), its pace of increase has slowed down.
The rate of change in high-end non-landed residential properties was likewise slower at Q123 (+4.7% QoQ), compared to the previous three quarters.
Savills added that there has been a YoY decline in private rental transactions (-11.7%) and HDB rental applications (-5.2%) in Q1, suggesting that “demand is falling more out of economic driven factors than high rents pushing foreign demand away from Singapore.”
“From mid-February, there are pockets of increasing slack in rental demand, especially those in the less than S$10,000 monthly rental bracket. As more private non-landed projects complete and the vacant period starts to stretch, landlords are likely to be more willing to negotiate, something that they were much less likely to do at the start of the year,” Savills said.
“Furthermore, there will be about 17,600 units completing in 2023, versus approximately
9,000 units in 2022,’ Savills added.