Private residential vacancy rises to 7.2% in Q3; Savills expects rents to remain broadly flat through 2027
Singapore's private residential rental growth could moderate in 2027 as increased housing completions are expected to keep vacancy rates elevated.
Savills observed that between 2021 and 2025, private residential rents tended to accelerate when vacancy rates fell below 6.5%, while rental growth generally moderated when vacancies rose above that level. If this relationship continues to hold, the elevated vacancy environment expected in 2027 could result in slower rental growth, or even mild rental softening.
In Q3 2026, the overall vacancy rate of private residential properties (excluding executive condominiums) rose by 0.8 percentage point to 7.2%, from 6.4% in the preceding quarter, following a surge in new completions. A total of 3,559 private residential units received their Temporary Occupation Permits (TOPs) during the quarter.
Despite higher vacancies, rental trends diverged across market segments in Q3. According to the URA, the Outside Central Region (OCR) led the growth, with the rental index of non-landed properties rising 3.1% QoQ, followed by the Rest of Central Region (RCR) at 1.5%. In contrast, the Core Central Region (CCR) recorded a 0.3% decline, marking its first quarterly contraction after three consecutive quarters of growth.
The weakness in the CCR appears to have been driven primarily by smaller units. Median rents for one-bedroom units declined by 0.7% QoQ, while those for two-bedroom units fell by 1.9% QoQ. Given that these two types of units accounted for more than half of rental contracts in the CCR, their weaker rents likely weighed on the overall rental performance.
Meanwhile, average rents for larger units, including three- and four-bedroom apartments, in high-end non-landed developments tracked by Savills edged up just 0.4% quarter-on-quarter (QoQ) to S$6.26 per sq ft. This represented a moderation from 1.7% growth in Q1 and 1.4% in Q2, suggesting that rental momentum is easing amid tighter housing allowances and increased competition from newer projects.
Leasing activity nevertheless remained robust, with rental contracts for private residential properties (excluding executive condominiums) commencing in Q3 rising 25.6% QoQ to 28,423, a record high for third-quarter leasing volume. Normanton Park led with 233 contracts, followed by Stirling Residences with 195, both properties in the RCR.
Looking ahead, about 8,868 private residential units are scheduled for completion in 2027, representing a 13.9% year-on-year increase from the 7,783 units projected for 2026. This could keep the vacancy rate above 7% for much of next year.
The expanding stock of co-living accommodation also presents growing competition for conventional leasing, especially among younger expatriates and cost-sensitive tenants. Offering significant rental discounts, it could put pressure on rents for one-bedroom and selected smaller two-bedroom units.
Employment trends could further weigh on leasing demand. Retrenchments rose for a fifth consecutive quarter to 4,800 in Q3/2026, while the combined number of Employment Pass and S Pass holders edged lower in the first half of 2026. These developments could signal some moderation in demand for private residential properties.
Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore, comments: “While the increase in housing completions and vacancies could result in slower rental growth, or even mild rental softening, any downside may face resistance. Tenants continue to display a preference for lease renewals and may be willing to accept some rental increases, while landlords face rising ownership costs, including higher property taxes. Taking these opposing forces into account, we expect private residential rents to remain broadly flat in both 2026 and 2027.”