Private home rents dip 1.3% in Q1

Rents fell steepest in the Core Central Region

Private residential rents slipped 1.3% year-on-year in the first quarter, partially reversing the 4.8% YoY increase in the same three-month period a year ago, data from Savills showed.

Home rents in the downtown core or the Core Central Region (CCR) fell the hardest, dropping 2.2% YoY last quarter, followed by the Rest of the Central Region which posted a 1.2% decline. The suburbs or Outside the Central Region also saw housing rents dio 0.8% YoY in the first quarter.

By district, private homes in the Chinatown-Tanjong Pagar area or District 2 saw the average median rental plummet by 12.3% in the first quarter. Districts 5 (Buona
Vista/West Coast/Clementi) also suffered an 8.6% drop in rents last quarter, while that of District 3 (Alexandra/Commonwealth) fell 6.1%.

Alan Cheong, executive director for research and consultancy at Savills Singapore, said rents have been gradually adjusting downwards recently as landlords move to attract tenants, especially those who missed out on the rental surge over the past two years 

“This could be due to lagged behaviour effects when landlords, in 2022, were slow to adjust rents upwards when the available stock for lease was dwindling fast,” Cheong said. “Landlords who saw themselves missing out on the rental bonanza last year just after their 2022 vintage leases were signed, now wanted to be recompensed for the opportunity costs.”

Savills expects pressure in the rental housing market to ease for the rest of the year due to fewer project completions. It estimated that there will only be 9,600 new private homes coming onstream this year, significantly lower than the 19,376 units completed last year.