Private housing rents to fall 5% y-o-y in 2024: Savills

Savills connects the weak rental fees to a variety of elements, including an arrival of new home completions and tougher economical issues that have generated a rise in retrenchments. The headwinds resulted in reduced leasing purchases, with 19,027 contracts recorded throughout landed and non-landed estates island-wide in 4Q2023, low 18.8% q-o-q.

For the whole of 2023, a sum of 82,257 exclusive housing properties were rented out in 2023, plunging 8.9% y-o-y. This is the smallest leasing amount since 2016, Savills highlights. The vacancy price for exclusive housing also edged up 2.6 percentage levels in 2023, as the net brand-new source of private homes, amounting to 19,390 units, outstripped net interest.

Overall, Savills predicts exclusive domestic rentals are going to fall 5% y-o-y for the entire of 2024.

Additional completions in 2024, which Savills estimates at 9,636 brand-new units, will put additional descending stress on rental fees. However, even though rental cost adjustments are on the horizon, landlords with lease contract that will end in the coming months are anticipated to elevate rental fees for brand-new deals, suggests Alan Cheong, executive manager for research and consultancy at Savills Singapore. “Landlords that have rent due will likely still get a rental boost since the current rents are still higher than those contracted two years ago,” he mentions.

In addition, greater mortgage rates and property taxes might motivate some proprietors to seek to hand down these costs to their renters. Nonetheless, Cheong cautions that proprietors looking for rental fees greater than the current market rate may fail to get a tenant, provided the range of choices currently offered out there.

Additionally, Savills mentions that a basket of condominiums monitor by the business observed their total common monthly rent drop 2.2% q-o-q in 4Q2023, underpinned by lesser rents for more than half (60.5%) of the apartments. For the whole of 2023, standard monthly rent grew 3.2% for Savills’ basket of apartments.

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URA’s island-wide rent index for non-landed private property dropped 1.8% q-o-q in 4Q2023, marking the very first quarterly downtrend from 4Q2020. The decline was driven by lower rental fees with all regions, with the Outside Central Region (OCR) recording the biggest autumn q-o-q of 2.8%, followed by the Core Central Region (CCR) at 1.6% and the Rest of Central Region (RCR) at 1.2%.

Research by Savills Singapore concludes that exclusive household prices are going to reduce 5% y-o-y in 2024. This appears as leasing action slowed further slowed in 4Q2023, the firm highlights in its most current residential leasing industry record released in February.


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