Interest rates are expected to remain low for some time, and low rates will likely support asset values and keep non-landed private home rents stable, says Cheong.According to Savills, the limited supply of new properties in the market could help landlords resist low rental offers and support rents, especially in the luxury segment. In addition, the ongoing redevelopment of older properties may also see units being taken out of the rental pool, which could further reduce supply.“These factors will likely provide some form of rental support, especially for high-end residential properties, which has a relatively tight supply pool. We expect that luxury rents will remain flat in 2025, with the potential for some slight growth on the back of a gradual economic recovery and limited supply of high-end residential properties,” says Cheong.The private residential leasing market recorded a modest rebound in 4Q2024, with rents rising by 0.2% q-o-q. However, landlords may face challenges this year, as rental growth is expected to be flat. According to a market report by Savills Singapore, the poor performance of the non-landed private residential market in the first three quarters of 2024 led to a 1.7% decline in rents over the entire year, the first full-year drop since 2020.There were 19,733 leasing transactions in 4Q2024, a 24.2% decline from the previous quarter. This was likely due to a decrease in net new rental demand as the number of employment pass and S pass holders decreased, along with a year-end seasonal lull in rental activity.However, there is still some growth in rental demand, according to George Tan, managing director of Livethere Residential at Savills Singapore. He adds that relatively more affordable rents can be found in suburban areas, which offer tenants lifestyle options such as more spacious units and convenient access to public transportation and amenities.Parc Esta, a 1,399-unit development in District 14, recorded the most condo leasing deals in 4Q2024, with 163 transactions at a median rent of $6.84 per square foot per month (psf pm). Other developments with a high number of rental transactions include Marina One Residences, The Sail @ Marina Bay, Normanton Park, and D’Leedon.In terms of rental price growth, the Outside Central Region saw average rents decline by 0.8% q-o-q in 4Q2024, while the Core Central Region and Rest of Central Region saw rents increase by 0.9% and 0.3% q-o-q respectively.However, the decline in rent prices in the Outside Central Region is likely due to more tenants shifting to central neighbourhoods with more reasonable rents, as seen in a basket of luxury properties tracked by Savills. The average monthly rent of high-end condos increased by 1.7% q-o-q in 4Q2024, suggesting a possible rebound in the luxury rental market.Looking ahead, landlords may face challenges in the rental market as companies continue to reduce headcounts and hire fewer expatriates. They may also have to contend with higher property taxes for non-owner-occupied residential properties and increased conservancy charges due to inflationary pressures. However, the tight supply of luxury properties on the rental market and the ongoing redevelopment of older properties may help landlords resist low rental offers and support rents, especially in the high-end segment.Interest rates are expected to remain low for some time, which will support asset values and keep non-landed private home rents steady. However, the limited supply of new properties may pose challenges for landlords. Nevertheless, Savills expects luxury rents to remain flat in 2025, with the potential for slight growth on the back of a gradual economic recovery and limited supply of high-end residential properties.
Private housing rents experienced a slight rebound in the fourth quarter of 2024, rising by 0.2% from the previous quarter. However, according to a report by Savills Singapore, landlords should not expect rental growth to continue this year.
The poor performance of the non-landed private residential market in the first three quarters of 2024 resulted in a 1.7% decline in rents over the entire year, the first full-year drop since 2020. This can be attributed to a decrease in net new rental demand as the number of employment pass (EP) and S pass holders fell last year, combined with a year-end seasonal lull in rental activity.
In the fourth quarter of 2024, there were 19,733 leasing transactions, a 24.2% decline from the previous quarter. This decrease may have been caused by the decline in net new rental demand and a year-end seasonal lull in rental activity.
Despite the decrease in leasing activity in the fourth quarter of 2024, there is still some growth in rental demand. According to George Tan, managing director of Livethere Residential at Savills Singapore, relatively more affordable rents can be found in suburban areas, which offer tenants lifestyle options such as more spacious units and convenient access to public transportation and amenities.
The development with the most condo leasing deals in the fourth quarter of 2024 was Parc Esta, a 1,399-unit development in District 14, with 163 transactions at a median rent of $6.84 per square foot per month (psf pm). Other developments with a high number of rental transactions include Marina One Residences, The Sail @ Marina Bay, Normanton Park, and D’Leedon.
In terms of rental price growth, the Outside Central Region (OCR) was the only region to see average rents decline by 0.8% quarter-on-quarter (q-o-q). In contrast, rents in the Core Central Region (CCR) and Rest of Central Region (RCR) grew by 0.9% q-o-q and 0.3% q-o-q respectively.
The decline in rent prices in the OCR is likely due to more tenants shifting to central neighbourhoods with more reasonable rents. This trend can also be seen in a basket of luxury properties tracked by Savills, with the average monthly rent of high-end condos increasing by 1.7% q-o-q in the fourth quarter of 2024. This suggests a possible rebound in the luxury rental market.
However, looking ahead, landlords may face challenges in the rental market as companies continue to reduce headcounts and hire fewer expatriates. They may also have to contend with higher property taxes for non-owner-occupied residential properties and increased conservancy charges due to inflationary pressures. Nevertheless, the tight supply of luxury properties on the rental market and the ongoing redevelopment of older properties may help landlords resist low rental offers and support rents, especially in the high-end segment.
Interest rates are expected to remain low for some time, which will support asset values and keep non-landed private home rents steady. However, the limited supply of new properties may pose challenges for landlords. Nevertheless, Savills expects luxury rents to remain flat in 2025, with the potential for slight growth on the back of a gradual economic recovery and limited supply of high-end residential properties.