Chart of the Day: Leasing transactions up 7% to record 23,875 in Q2

The Outside Central Region posted the largest increase in leasing volume.

This chart from Savills shows that the rental market for private residential properties rose 7% YoY to a record 23,875 units in the second quarter, higher than the 22,317 leases recorded in Q2 2018.

Also read: HDB resale transactions down 7.6% to 1,921 units

This marks the highest point amongst all second quarters figures, according to data from the Urban Redevelopment Authority (URA).

By location, leasing volume rose across the board, with the Outside Central Region (OCR) posting the largest increase of 9.3% QoQ, followed by the Core Central Region (CCR) with 7.9% QoQ growth and the Rest of Central Region (RCR) up 3.7% QoQ.

Meanwhile, foreign demand reportedly remained stable throughout the quarter, although Savills noted that the state of global and regional economies may have driven them to sign shorter leases.

“Demand from foreigners working in Singapore remained stable and was led by employees from pharmaceutical, food & beverage and tech companies. However, amidst ongoing global economic uncertainties, expatriate tenants were unsure about their tenures in Singapore and some were choosing to sign shorter leases. These can range from six months to one year,” the report read, noting that a decade ago, the norm was to sign on for a two-year lease.

Local movement by owners and tenants in residential projects that were sold successfully through collective sales reportedly continue to contribute a substantial portion of leasing demand, the report noted.

“High prices of private residential properties, together with the tepid market sentiment since July 2018 because of the adjusted property cooling measures, have caused some owners to postpone purchasing replacement homes and to lease temporarily,” it added.