Rental listings are on the rise as demand falls and rents fall
PropertyGuru’s portal saw a median asking rental increase of 27,3% between January and December 2023. The median transacted rate, on the contrary, increased 35.3%.
Lee pointed out that rents have declined due to an ease in rental demand as well as a rise in supply during the past year or two.
Lee suggests that those landlords who expected tenants to pay higher rental rates in the second halves of 2023 could have experienced longer leasing times or leased their properties at lower prices.
The gap between asking prices and rents that are actually paid will start to close in 2023.
According to him, the shrinking gap is a sign of a change in the rental market. More landlords are not increasing rents. This trend may have been influenced by the fact that rental properties remained on the market for a longer period of time, causing landlords adjust their expectations so they align with market conditions. Some areas in Singapore are bucking the trend.
Renter interest in and demand for rental listings District 9 (Orchard & River Valley) was high, as were the visitation and market friction rates.
This indicates that the rental market is currently undersupplied (in the region), possibly signaling a landlord’s marketplace with increased competition among tenants.
The median rent that potential tenants were seeking in District 9 also amounted to S$6,000 per a month. Rent at the 25th per centile was S$4,000 a month.
99.co data showed that, in January 2018, the average monthly rent of a two-bedder unit at The Sail @ Marina Bay (a project popular with tenants in the Core Central Region) was S$6,656. This was a 2.4% increase from the S$6,499 of January 2023.
Stirling Residences in the Rest of Central Region was S$4,620 (down 7.2%) in January 2024. This is compared to the S$4,979 of the previous year. Parc Riviera is located in the Outside Central Region. The average monthly rent of a two-bedder at Parc was S$3,740. This is down 8.2% from January 20,23 when it was S$4,072.
Rental prices are experiencing a correction due to continued downward pressure, both on asking and transacted rental rates
The rental market has reached a critical point. However, due to the market uncertainty it is difficult for us to predict the extent and duration of the correction.
According to the latest estimates from SRX on Thursday, apartment rents rose by 0.3 percent in March following seven straight months in decline.
The rent increase over the last two year may not have been as substantial as expected. Rent corrections are also dependent on the location and characteristics of a particular project.
According to her, older units and those in less desirable areas or characteristics may cause rents to fall. Some newer projects in prime locations like Klimt Cairnhill freehold condominium in District 9 remain in high demand and rents are stable.
Rents are declining for units with three beds and smaller. This could indicate an increase of enquiries or landlords’ resistance to further reduce rents. In the meantime, due to limited availability, large bedroom types have held their ground.
Orchard and River Valley, both desirable locations, continue to be bucking the trend. Potential tenants are seeking median rents of S$6,000 per monthly.
PropertyGuru’s report found that asking rents from private residential property landlords in Singapore are declining since the fourth quarter of 2023. This is because rental demand has decreased and supply increased.
The study, which was published in March, revealed that asking rents, as shown by the listings on PropertyGuru, steadily declined during the last quarter of 2023. The corrections to asking rents between October and November led to a decline in the transacted rents as well.
It follows two years marked growth in asking and transacted price. According to the Urban Redevelopment Authority’s rental index, rents of non-landed private houses grew by 38.8% from Q4 2021 to Q4 2023.
