Chart of the Day: SG’s prime rent for luxury lettings eases to 24.5% in Q2

The city has the highest rental value in the index.

Singapore’s rent on luxury properties has eased to 24.5% in the 12 months to June, attributable to high demand as residents return to cities following lockdowns, affordability challenges as prospective buyers are priced out of the sales market due to rate hikes, and limited new supply due to construction disruptions during the pandemic.

Rental values in the 10 cities covered by the Prime Global Rental Index (PGRI) increased by 7.5% in the year leading up to June. 

Although this growth rate was slightly lower than the previous quarter's 8.2% and significantly below the peak of 12.2% seen in Q1 2022, it remains well above the pre-pandemic trend. 

Amongst the 10 cities, Singapore ranked the highest in the PGRI. This was followed by London, Sydney, Toronto, Auckland, New York, Geneva, Tokyo, Monaco, and Hong Kong.

Before the pandemic, the ten-year average annual growth was 2.2%, while since the beginning of 2021, the index has experienced an average growth of 6.6%, with current growth nearly three times higher than the pre-pandemic average.

The recovery in rents over the past two years has been remarkable, with the overall index rising by 23% from Q1 2021 to the present. 

Certain cities have seen even stronger rental growth, including New York, Singapore, and London, with growth rates of 56%, 53%, and 51%, respectively, over the same period.

While some PGRI growth hubs have seen a moderation in the pace of rent increases, the overall trend remains positive. London's growth decreased from 16.9% to 14.4%, and New York's dropped from 10.6% to 6.2%.