Singapore non-landed home rental index rises for second straight quarter

The rental index inched up 0.2% in Q4.

Across the island, in the last quarter of 2024, Savills noted that the rental index for non-landed private residential properties by the URA inched up by 0.2% QoQ, marking a second consecutive quarter of improvement, though the growth slowed from the 0.5% increase seen in the previous quarter.

Here’s more from Savills:

By market segment, the rental growth for non-landed private homes in the reviewed quarter was led by the Core Central Region (CCR) at 0.9% QoQ, followed by the Rest of Central Region (RCR) at 0.3% QoQ. In contrast, the Outside Central Region (OCR) recorded a 0.8% QoQ decline, likely due to tenants’ shifting to apartments and condominiums in more centralised locations, driven by more reasonable rents.

Arising from the rental decline in the first half of the year, island-wide non-landed rents still fell by 1.7% for the entirety of 2024, representing the first full year decline since a 0.5% drop in 2020. This could signal a stabilisation of rental levels after the sharp growth seen over the previous three years from 2021 to 2023, marking a return to market norms for the leasing market.

Despite declining leasing activity, the average monthly rent of high-end condominiums in Savills’ basket increased by 1.7% QoQ to S$5.85 psf in Q4/2024. This quarterly growth suggests a slight rebound after a consistent decline over the preceding five quarters, starting from Q3/2023.

While companies continue to cut costs by reducing headcounts, leading to fewer hires of foreign personnel, landlords are facing higher property taxes for non-owner-occupied residential properties and increased conservancy charges due to inflationary pressure. 

These factors, along with the limited availability of large luxury apartments for leasing, have helped landlords resist underpriced rental offers. As a result, this contributed to a turnaround in rents by year’s end.