Rents of private condos down 2.2% m-o-m in May: Savills
Amidst the challenging economic conditions in Singapore, private non-landed home rents have registered a decline in May. URA data suggests that the average median rents for one- to four-bedroom units saw a decrease of 2.2% from April. Alan Cheong, Executive Director of Savills Research & Consultancy, notes that this is unsurprising, since the influx of new homes and tightened corporate budgets, leading to the reduction of rental expenses for expats or layoffs of employees, has created an environment for rental softening.
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This softening of rents provides a much-needed reprieve for tenants in an otherwise overwhelming economic situation. Marcus Loo, CEO of Savills Singapore, adds that this allows the market to reset to a healthier equilibrium for the long-term good of all stakeholders. However, while the drop in rents is mild, overall yields for landlords remain relatively healthy.
Savills May 2023 Rental Guide shows that three-bedroom condo units registered the biggest drop of 3.2% m-o-m in May. District 4 was the highest-median submarket for such units, with $9,300 median rent, followed by locations in District 1 and District 9 at $8,500 and $7,500 respectively.
Despite the impact of current economic conditions, these rental figures demonstrate that landlords of private non-landed homes are still in a relatively stable position. With the rental market correction, tenants too can find much-needed relief while the market resets to a more sustainable foundation.