Luxury home rents predicted to remain 'stagnant' until end-2013

New supply will come from unsold units.

According to Savills, rents for luxury market homes may remain stagnant until year’s end as most of the new supply is unsold units held by developers who cannot lease them out. Rents for mass-market housing could hold up as demand drifts from the high-end and mid-tier markets.

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Rents for luxury homes may still see support until year’s end because much of the completed stock is in the form of unsold units still in the hands of developers who cannot lease them out unless they pay ABSD by performing an asset sale to an investment holding company. 

Also, there is an increasing number of overseas nationals arriving on short-term assignments, paying slightly higher rents than those here on a longer term basis. For mass-market developments, rents could hold up as demand drifts from the high-end and mid-tier markets.