Singapore’s rental market performed strongly in the third quarter this year, with private residential leasing volumes increasing 11.6 percent quarter-on-quarter to 15,083 cases, according to a Savills report.
This brings total leases secured during the first nine months of the year to 40,319, up 6.0 percent from the 38,023 leases signed over the same period last year.
With the Ministry of Manpower’s Fair Consideration Framework (FCF) taking effect in August 2014, leasing demand for staff accommodation or short-term rentals is expected to grow over the next six months, “as a new influx of overseas nationals move their plans forward to relocate here before both the job market and immigration policies tighten further”, the report noted.
Despite strong demand, the vacancy rate of private residential units rose to 6.1 percent quarter-on-quarter, or 17,459 vacant private homes island-wide at end-Q3.
Meanwhile, the Urban Redevelopment Authority (URA) revealed that the island-wide rental index of private residential properties increased slightly by 0.2 percent in Q3, while the average monthly rent of high-end condominiums monitored by Savills held firm at S$4.86 psf.
“The rental market is hitting turbulence as more completions stack up and tighter controls on the overseas labour workforce are implemented,” said Alan Cheong, Research Head at Savills Singapore.
Moving forward, the residential leasing market is expected to remain resilient with rents holding firm until the end of the year, on the back of an improving global economy and healthy job market in Singapore.
“However, the rental market is gradually turning to favour tenants due to tighter overseas hiring and immigration policies, and the steady supply of new housing stock in the pipeline,” the report added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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