New launches dampen condo rent volumes in August

Compared on a monthly basis, condo rents will decline in the following months, analysts said.

Condo rents in Singapore are 17.3% higher in August compared to in 2022, but decreased slightly from a month ago, latest data from 99-SRX showed.

Compared to August 2022, rents in the core central region (CCR), rest of central region (RCR), and outside central region (OCR) reported double-digit jumps of 13.9%, 17.4%, and 20.1%, respectively.

When compared to July of this year, however, all three regions' rents declined. CCR rents dropped by 1.7%, RCR rents fell by 0.7%, and OCR rents decreased by 0.5% on average. 

The launch of several newly-completed condo project in August may have weighed on condo rentals during the month, noted Huttons CEO Mark Yip.

“More newly completed condos entered the market in Aug 2023 thereby intensifying the competition for tenants. Against a backdrop of slowing employment growth and more tenants relocating overseas to work remotely, condo rents came under pressure in August,” Yip said.
A total of 6,730 units were rented in August, 7.6% lower than the 7,287 condos rented in July.

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This is also 10.3% lower than a year ago, and 11.6% lower than the 5-year average volume for the month of August. 

OCR logged the most condo rent transactions, making up 36.2% of the total volumes. RCR made up 33.6% of all volumes, and CCR clinched the remaining 30.2%.

The lower rental volumes and rent prices hovering around the same levels for the past six months may be signs that the condo rent market is stabilizing, according to Christine Sun, senior vice president of research and analytics, OrangeTee & Tie.

Although rental volume is usually highest in the third quarter of the year, the market was noticeably quieter than the previous year, Sun said. A total of 14,017 units were leased in July and August 2023, 8.7% less than the 15,349 units leased in the same months last year.

“The trends indicate that rents may have peaked. Due to the year-end holidays, rental volume may continue to contract over the next few months,” Sun said.