Have Singapore residential rents reached a plateau?

The rental growth has softened, especially in the high-end market.

URA’s statistics revealed that the rental index of non-landed private residential properties in Singapore rose at a much slower pace of 0.2% in Q3/2023. For the previous ten quarters starting Q1/2021, the quarterly growth rate ranged from 1.4% to 8.3%. 

Savills said in a report that by region, the rental growth of non-landed properties in the RCR and OCR also slowed from the last quarter, registering increases of 1.9% and 1.3% respectively in Q3. In contrast, rents of non-landed properties in the CCR declined by 1.7% QoQ, the first time since Q1/2021. 

Here’s more from Savills:

It confirmed our view that rents have reached a plateau, particularly in the high-end market segment. This is the result of the confluence of events ranging from the uncertain economic outlook, high inflation, weakening labour market as well as the increased number of completed homes. 

The average monthly rent of high-end non-landed residential properties tracked by Savills was S$6.16 per sq ft per month in Q3/2023, dipping 0.6% QoQ. This is also the first rental decrease for such properties, which have enjoyed an accumulated growth of 51.9% for the last two and a half years. 

A detailed check showed that 20 projects in the Savills basket showed a quarterly rental decline in Q3/2023, up from 15 in the previous quarter. By location, the River Valley and Downtown micro-markets experienced higher QoQ drop compared to other areas.