Overall Average Median Rents For 1-to-3 Bedroom Units In Core Central Region Fell By 1.5%; Rose In Rest Of Central Region And Outside Central Region By 1% And 0.3% Respectively
Savills Research’s Q3 rental guide revealed that the top three highest average* median rents for 3-bedroom** units, excluding outliers***, were in Districts 1 (Boat Quay/Marina/Raffles Place), 4 (Harbourfront/Telok Blangah) and 9 (Orchard/River Valley).
Rents in these districts, with the exception of District 9 (Orchard/River Valley), were lower than the second quarter. Quarter-on-quarter (QoQ), they dropped by 2.8% to S$8,650 per month in District 1 (Boat Quay/Marina/Raffles Place), and 3.6% to S$8,000 per month in District 4 (Harbourfront/Telok Blangah). There was a slight increase by 1.3% to S$7,600 per month in District 9 (Orchard/River Valley).
Overall, rents for 1-to-3-bedroom units in the Core Central Region (CCR) fell by 1.5% but rose in the Rest of Central Region (RCR) and Outside Central Region (OCR) segments, by 1% and 0.3% respectively. The average increase for 1-to-3 bedrooms was 0.1%.
In the RCR, the average median rents for 3-bedroom units in Districts 5 (Buona Vista/West Coast/Clementi), 8 (Farrer Park/Serangoon Road) and 13 (Macpherson/Potong Pasir) increased by 3.8% QoQ. Rents in District 21 (Clementi Park/Upper Bukit Timah) grew the most (4.2%) QoQ.
The largest growth can be seen in the OCR where the average median rents for 3-bedroom units in Districts 28 (Seletar/Yio Chu Kang) and 14 (Eunos/Geylang/Paya Lebar) grew by 5.3% and 4.4% QoQ respectively.
On a year-on-year (YoY) basis, rents fell 4.3% for the 1-to-5-bedroom units. For 1-to-3-bedroom units, they fell 4.2% YoY. A quarter prior, the YoY change for 1-to-5-bedroom units was -5.3% while rents for the 1-to-3-bedroom units fell 6.2% YoY. Although rents are generally turning the corner on a QoQ basis, they are still below what they were a year ago. Over the course of the next few quarters, we may see the YoY rent change begin to stabilise and hover around a + or – 1% difference.
George Tan, Managing Director, Livethere Residential, Savills Singapore says, “The market for 3-bedroom apartments continues to see stable demand as they appeal to expatriates with families, particularly in well-connected and sought-after locations. However, global economic uncertainty and lower rental budget may put some pressure on the positive but competitive leasing activity, thereby keeping the rental growth in check.”
Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore comments, “We believe that the overhang in supply arising from the 19,376 units that were completed in 2023 have been cleared out of the system. The completion numbers in Q2/2024 were also low, at 1,882 units, further helping to ease the indigestion from the 2023 vintage of supply. For 2024, about 9,100 units could be completed and this rapid climbdown in new supply is probably the main reason for the turnaround in rents.
Although rents have turned the corner, we believe that the upside will be capped by several factors, chief amongst which is the climb back up to 3,000+ per quarter unit completions. This will increase the competition level for potential tenants. Inflationary pressures are also driving up conservancy charges, giving landlords another reason not to give in to low ball rental offers.”