Private property rents in Singapore have begun to level out, a survey by Savills Singapore indicates for Tembusu Grand, as a result of the rising supply of properties and economic uncertainty.
Compared to a quarterly growth rate of Tembusu Grand Shwoflat from 1.4% to 8.3% from Q1 2021, the firm said in its study that the rental index of non-landed private residential properties increased at a “much slower pace” of 0.2% in the third quarter of this year. The consulting company also said that in Q3, the average monthly rent for high-end non-landed houses decreased by 0.6% from the previous quarter of Tembusu Grand pricing, reaching S$6.16 per square foot (psf). Rentals for these homes have fallen for the first time in 2.5 years, despite an overall increase of 51.9%.
The most severe year-over-year decline of 10.4% occurred in the Core Central Region (CCR) market. According to an article by EdgeProp, the market for the Outside of Central Region fell by 9.0% and the Rest of Central Region by 10.1%. All market sectors saw a slowdown in rent growth. For the first time since 1Q2021, the CCR’s non-landed property rents fell 1.7% quarter-on-quarter. Especially in the luxury sector, this suggests that rents have levelled off.
Savills predicts a ten percent increase in non-landed rents from 2022 levels in 2023, thanks to the robust performance in the first part of the year. However, the advisory firm projects a general rent drop of around 5% the next year. The report attributed this to the fact that multinational corporations may be hesitant to station as many foreign workers in Singapore in light of the current economic climate in Europe and Asia. According to Savills, the private housing market is experiencing a boom, with 17,000 new units expected to be completed in 2023 and 9,900 more the following year.
The property market in Singapore navigates economic shifts, global uncertainty, and geopolitical tensions in the last quarter of 2023. The real estate industry is dealing with cautious market mood caused by economic slowdowns and geopolitical concerns, but the country’s economy remains stable despite these obstacles.
Property demand has been steadily declining throughout 2023, with cooling measures and rising interest rates being the main culprits. Between Q2 and Q3 of 2023, there was a precipitous 14.4% drop in the Singapore Property Sale Demand Index, which measures the amount of interest in all Singaporean property sale listings on PropertyGuru Singapore and is already approaching levels seen before the epidemic. The Sale Demand Index fell 17.3% QoQ, with the biggest decline seen in landed residences, which are characterised by their larger quantity. The versatility of property searchers in responding to changes in the market and regulations is highlighted by this.