Singapore private residential rents on an uptrend for fifth consecutive quarter

Rents increased 2.6% in the final quarter of 2021.

Despite a quarterly decline in leasing volume, private residential rents in Singapore trended upwards for the fifth consecutive quarter. 

According to Savills, in Q4/2021, the URA rental index for all private residential properties rose 2.6% QoQ, a faster growth compared to the 1.8% in the previous quarter. 

Here’s more from Savills:

While rents of both landed and non-landed properties increased in the quarter, a larger growth of 2.7% was recorded for non-landed properties. Rents of landed homes grew by a muted 1.2%, in comparison to the 4.7% in Q3/2021. Growth in rents of non-landed homes was recorded for all three market segments, with CCR registering the largest increase of 2.9% QoQ, larger than the 0.7% growth in the previous quarter. 

This may be due to more entering Singapore due to the relaxation of borders and limited housing stock leading to landlords increasing rents. As a result of the introduction of the new cooling measures, higher ABSD rates for foreigners’ acquisition of properties may deter expatriates/foreigners from purchasing properties, hence resulting in more staying put in current accommodations or renting homes instead. 

Rents of private homes in RCR also recorded a larger QoQ increase of 2.8% in Q4/2021, as compared to the 1.6% in Q3/2021. For non-landed homes in OCR, rents continued to expand for the sixth consecutive quarter, albeit a slightly lower 2.4%, in comparison to the 2.6% growth in the previous quarter.

Hence, as a result of the limited completions and construction delays affected by the COVID-19 pandemic, as well as higher leasing demand as working-from-home becomes a norm, rents of private residential properties surged 9.9% in 2021, a reversal from the 0.6% contraction in 2020. The URA rental index of both landed and non-landed properties expanded, with a larger YoY increase of 9.9% for non-landed properties. 

Rents of non-landed homes in OCR recorded the largest growth of 11.1%, the largest YoY expansion since 2010 when rents rose 19.0%. This can be attributed to leasing demand from HDB upgraders that are waiting for their new homes to be completed and have sold their current homes amid the robust HDB resale market, as well as those seeking for more affordable accommodation options. Nevertheless, rents of non-landed homes in CCR and RCR expanded 9.8% and 9.5% respectively in 2021.

Similarly, monthly rents for high-end non-landed private residential projects tracked by Savills continued on the upward trend, increasing for the fourth consecutive quarter by 2.3% QoQ to S$4.29 psf in Q4/2021. As the border restrictions gradually ease, there may be more foreigners entering the country. In addition, with the new cooling measures, foreigners that intend to stay in Singapore for the longer term may also lease homes in the meantime while taking a wait-and-see approach.

Thus, for the whole of 2021, rents of luxury homes rose 5.3%, rebounding from the 2.2% decline in 2020. This was the largest yearly increase since 2010 when rents surged 14.4%.