Rents on the decline as demand drops and rental listings increase
In District 9 in Orchard (River Valley), rental listings maintained high visitor rates and strong renter interests, while experiencing increased market friction.
This may signal a market dominated by landlords, with renters in heightened competition.
In March, potential tenants also requested a median monthly rent of S$6,000 for District 9. The monthly rent at the 25% percentile is S$4,000. That of the 75% percentile is S$8,800.
99.co reported that the monthly average rent for two-bedders at The Sail @ Marina Bay in January was S$6,656. The project is a favorite among tenants of the Core Central Region. It was an increase of 2.4 percent from January’s S$6,499.
Stirling Residences was a well-known project in the Rest of Central Region. Its rent in January of 2024 was S$4,620. This is down 7.2% on the S$4,979 of last year. Parc Riviera’s Outside Central Region saw an average two-bedder rent of S$3,740 per month in January 2020, a decrease of 8.2 % from January 2013 when the rent was S$4,072.
Orchard & River Valley remain desirable areas, and rents are at a median of S$6,000/month
PropertyGuru has found that since the last quarter in 2023, private residential landlords are asking lower rents as demand for rental properties is easing.
The study, released in late march, found that asking rental rates – as measured by rents indicated in listings on PropertyGuru portal – steadily dropped in the final three months of 2023. The correction of asking rentals in October and December led to a decrease in transacted rental rates in December.
After two years of substantial growth, both for asking prices and transacted values. Rents for non landed private homes have grown 38.8 percent between Q4 2018 and Q4 2019.
PropertyGuru’s portal’s median asking rent increased by 27.3% from January 2022 until December 2023. The median rent for transacted transactions, meanwhile rose by 35.3%.
The drop in rents was due to a lowering of rental demand and an increased supply in recent years
Lee believes that landlords expected to receive higher rents from tenants in the 2nd half of 2023 would have either had longer waiting periods or might have ended up leasing their properties for lower prices.
In 2023, the gap between asking rental prices and actual rents started to narrow.
He explained that the narrowing rent gap was a sign that there had been a shift on the rental scene, where more landlords are refraining to increase their rents. The longer rental properties remain on the marketplace, the more likely this trend will be influenced. As a result, landlords are likely to adjust their expectations according to market conditions. Certain areas in Singapore, however, have bucked this downward trend.
Rental prices may be experiencing a downward correction, as there is a continued downward trend in both the asking and actual rents.
The rental industry is about to reach a tipping point. Due to market uncertainty, it is difficult, if not impossible, to predict how severe the correction will be.
SRX and 99.co released flash estimates on Thursday showing that rents for condominiums grew by 0.3 % in March.
A drop in rent may be minimal, considering the dramatic increase in rents in the past two-year period. Rent correction will also depend upon the attributes and location of the project.
She explained that rents can be lowered by older units with less desirable features or in locations. Rents can remain high for certain projects that are newer or in desirable locations. For example, the freehold apartment Klimt Cairnhill is located in District 9 and remains highly desired.
Rents for small units and three-bedders are no longer falling. This could be an indication of a rise in inquiries, or the landlord’s resistance to lower rents. There is a limited number of larger bedroom types.
