Residential rents in this Singapore region grew the most in Q1

Rents of non-landed homes in this region increased 2.9%.

As a result of reduced completions and lower vacancy rate, along with strong rental demand, private home rents remained resilient. According to Savills, in Q1/2021, the URA rental index for all private residential properties recorded a second consecutive quarter of increase by a larger growth rate of 2.2%, in comparison to the 0.1% increase in Q4/2020. This larger increase was attributed to the 2.4% QoQ growth in rents of non-landed private residential properties. 

Here’s more from Savills:

Across the market segments, rents of non-landed homes in CCR grew the most by 2.9%, followed by OCR and RCR of 2.1% and 2.0% respectively. For CCR, the increase came after three consecutive quarters of decline, which may be due to lesser available new stock and lower vacancy rate. 

Similarly, monthly rents for high-end nonlanded private residential projects tracked by Savills rose by 3.5% QoQ to S$4.22 psf in Q1/2021. The turnaround came after three consecutive quarters of declines.

Apart from the abovementioned factors such as lower new supply and vacancy rate, there was also stronger leasing demand emanating from high net-worth individuals arriving in Singapore as the Covid-19 situation was much more controlled in the city-state prior to the resurgence of local community cases in the recent month.

Stock and vacancy

In Q1/2021, 1,832 private housing units obtained their Temporary Occupation Permits (TOPs), bringing about a slight quarterly increase of 0.5% to 377,817 units. This was a larger growth than the 0.2% in the previous quarter. Bulk of the new completions were from The Tapestry located at Tampines (861 units), Seaside Residences located at Siglap (841 units) and Kandis Residence located at Kandis Link (130 units), which are all situated in OCR. 

With more completions in OCR, vacant stock in the market segment recorded a QoQ increase of 4.2% to 9,997 units in Q1/2021. On the other hand, the higher leasing volume and lesser completions in CCR brought about a quarterly decline of 13.6% to 7,755 units in the quarter. This was the fi rst decline after four consecutive quarters of increase in vacant stock. 

Similarly, the vacant stock in RCR fell 17.1% QoQ to 6,477 units. As such, vacancy rates in CCR and RCR decreased 1.5 ppts and 1.2 ppts to 9.5% and 6.1% respectively, while that in OCR grew slightly by 0.2 of a ppt to 5.3%. Led by a QoQ decrease of 0.7 of a ppt in vacancy rate of non-landed residential properties islandwide, the vacancy rate of private residential properties declined by 0.6 of a ppt to 6.4% in Q1/2021. This was the first decline after two previous quarters of increase.