journo
02-09-22, 10:39
Savills expects private rents to climb higher, but a recession might hamper the "super bull cycle"
Sep 01, 2022
With private residential rentals in Singapore increasing by 11.7% in the first half of the year, Savills Research is increasing its year-over-year growth projection for the entire year of 2022 from 10-15% to 15-20%.
The research arm of the real estate firm Savills predicted that annual rent rises will continue long into 2023 at a rate of 5 percent.
In the second quarter of 2022, the Urban Redevelopment Authority rental index for private residential properties increased by 6.7% quarter-over-quarter due to rising rental demand and limited completions caused by building delays.
This "unabated" increase in private residential rentals poses problems, according to Savills. For instance, corporations may restrict the amount of foreign workers they recruit or transfer them to work remotely from resort centers if rents are too exorbitant. This might subsequently reduce rental demand and have a negative effect on rental pricing.
Alan Cheong, executive director of research at Savills Singapore, stated, "Global recessionary conditions might slow the super bull cycle, notwithstanding the fact that the most likely scenario is for rents to continue to spiral upwards."
Notably, only two of the top five non-landed projects with the highest leasing transactions during the second quarter were located in the Core Central Region (CCR). Rest of Central Region (RCR) and Outside Central Region (OCR) accounted for the remainder (OCR).
According to the research firm, the dramatic decline in CCR lease volume was the result of a "lack of adequate housing for well-off expats." Savills believes that some expatriates have deferred their migration to Singapore or are temporarily residing in serviced flats due to not receiving their desired housing.
"The comparatively slower fall in transaction volume in the mid- and mass-market sectors indicates that people with budgets sufficient to rent an apartment in the CCR in 2021 are now living further from the city's core," stated the research firm.
Savills also found that the majority of private flats rented during the quarter were one- and two-bedroom units.
The research firm reported a 7.6 percent quarter-on-quarter increase to S$4.79 per square foot (psf) for high-end, non-landed, private residential developments - the most since Q1 2014, when rentals hit S$4.84 psf.
"The lack of major new construction around the island has allowed landlords to set rents. This is particularly evident in good neighborhoods, according to Savills.
Sep 01, 2022
With private residential rentals in Singapore increasing by 11.7% in the first half of the year, Savills Research is increasing its year-over-year growth projection for the entire year of 2022 from 10-15% to 15-20%.
The research arm of the real estate firm Savills predicted that annual rent rises will continue long into 2023 at a rate of 5 percent.
In the second quarter of 2022, the Urban Redevelopment Authority rental index for private residential properties increased by 6.7% quarter-over-quarter due to rising rental demand and limited completions caused by building delays.
This "unabated" increase in private residential rentals poses problems, according to Savills. For instance, corporations may restrict the amount of foreign workers they recruit or transfer them to work remotely from resort centers if rents are too exorbitant. This might subsequently reduce rental demand and have a negative effect on rental pricing.
Alan Cheong, executive director of research at Savills Singapore, stated, "Global recessionary conditions might slow the super bull cycle, notwithstanding the fact that the most likely scenario is for rents to continue to spiral upwards."
Notably, only two of the top five non-landed projects with the highest leasing transactions during the second quarter were located in the Core Central Region (CCR). Rest of Central Region (RCR) and Outside Central Region (OCR) accounted for the remainder (OCR).
According to the research firm, the dramatic decline in CCR lease volume was the result of a "lack of adequate housing for well-off expats." Savills believes that some expatriates have deferred their migration to Singapore or are temporarily residing in serviced flats due to not receiving their desired housing.
"The comparatively slower fall in transaction volume in the mid- and mass-market sectors indicates that people with budgets sufficient to rent an apartment in the CCR in 2021 are now living further from the city's core," stated the research firm.
Savills also found that the majority of private flats rented during the quarter were one- and two-bedroom units.
The research firm reported a 7.6 percent quarter-on-quarter increase to S$4.79 per square foot (psf) for high-end, non-landed, private residential developments - the most since Q1 2014, when rentals hit S$4.84 psf.
"The lack of major new construction around the island has allowed landlords to set rents. This is particularly evident in good neighborhoods, according to Savills.