Asking rents down as demand slows and rental listings surge

But desirable locations such as Orchard and River Valley continue to buck the trend, with median rent sought by potential tenants at S$6,000 per month

Apr 22, 2024

ASKING rents of private residential landlords in Singapore have been slipping since the last quarter of 2023, as rental demand eased and supply surged, a report by online property portal PropertyGuru found.

The study, published in late March, showed that asking rents – as indicated by rents specified in listings on PropertyGuru’s portal – steadily declined in the last three months of 2023. The correction in asking rents in October and November consequently led to transacted rents dipping as well in December, said Lee Nai Jia, head of real estate intelligence, data and software solutions at PropertyGuru.

This follows two years of significant growth for both asking and transacted prices. Based on the Urban Redevelopment Authority’s rental index, rents for non-landed private homes grew by 38.8 per cent between Q4 2021 and Q4 2023.

Between January 2022 and December 2023, the median asking rent on PropertyGuru’s portal rose by 27.3 per cent. The median transacted rent, meanwhile, rose 35.3 per cent.

The decline in rents comes amid an easing in rental demand and a surge in supply in the past one to two years, Lee noted.



Based on PropertyGuru’s engagement data – a proxy for home demand measured by visits on the portal, time spent on the listing, and outreach to agents – rental demand plunged by nearly 70 per cent in December 2023 from a peak in July 2022. Meanwhile, the number of property listings on the portal has been on the rise since January 2023, up 62.9 per cent through the year.

This suggests that landlords who were expecting tenants to pay higher rents in the second half of 2023 might have faced longer waiting times in leasing their properties, or may have eventually done so at lower prices, said Lee.

The gap between asking and transacted rents began narrowing in 2023, he added.

The narrowing gap indicates a shift in the rental market, with more landlords refraining from further increasing asking rents, he said. “This trend was likely influenced by rental properties remaining on the market for longer periods, prompting landlords to adjust their expectations to align with market conditions and tenant affordability.”

Still, Lee pointed out that certain areas in Singapore have bucked the downward trend.

For instance, rental listings in District 9 (Orchard, River Valley) maintained the highest visitation rates with strong renter interest and potential demand, and saw increasing market friction.

“(This) suggests that there is greater demand for rental properties than the market currently supplies (in the area), potentially signalling a landlord’s market with heightened competition among renters,” said Lee.

The median rent sought by potential tenants in District 9 was also S$6,000 a month in March this year. Monthly rent at the 25th percentile was S$4,000, while that of the 75th percentile was S$8,800.

Similarly, data from 99.co showed that the average monthly rent for a two-bedder at The Sail @ Marina Bay – a popular project among tenants in the prime Core Central Region – was S$6,656 in January this year. It was up 2.4 per cent from January 2023’s S$6,499.

In comparison, that of Stirling Residences – a popular project in the Rest of Central Region – was S$4,620 in January 2024, down 7.2 per cent from the previous year’s S$4,979. At Parc Riviera in the Outside Central Region, the average monthly rent for a two-bedder was S$3,740 in January 2024, down 8.2 per cent from January 2023’s S$4,072.

Price correction

Lee predicts continued downward pressure on both asking and transacted rents, with rental prices likely undergoing a price correction.

“The rental market is approaching an inflection point,” he said. “However, given the market uncertainty, it would be challenging to predict the extent of correction.”

According to flash estimates released by SRX and 99.co on Thursday, condominium rents inched up by 0.3 per cent in March, following seven straight months of decline.

Still, Christine Sun, OrangeTee Group’s chief researcher and strategist, noted that any drop in rent may not be that substantial, given the significant increase in rents over the past two years.

The correction in rents will also depend on the project’s attributes and location, said Anthea Yeo, senior associate director at PropNex.

Rents may therefore be pulled down by older units or those with less desirable locations or traits, she said. For instance, some newer projects or those in desirable locations, such as freehold condominium Klimt Cairnhill in District 9, remain highly sought after, with rents staying firm, Yeo said.

The decline in rents for three-bedders and smaller units has slowed, added Huttons senior director of data analytics Lee Sze Teck. “This may point to an increase in enquiries, or resistance from landlords to lower rents further.” Meanwhile, larger bedroom types are holding because of limited supply, he said.

https://www.businesstimes.com.sg/pro...listings-surge