Despite a sluggish residential sales market, Singapore’s leasing market held firm in the fourth quarter of 2013 and for the entire year, revealed a Savills report.
In Q4, leasing transactions increased 4.4 percent to 11,975 compared to the same period in 2012, while for the whole year it climbed 5.7 percent to 52,294.
“The healthy leasing demand could have been driven by short-term rentals from the new influx of overseas nationals who brought forward their plans to relocate here before both the job market and immigration policies tighten further,” Savills said.
However, URA’s island-wide rental index for private homes slipped by 0.5 percent in the last three months of 2013, its first drop since Q3 2009.
Similarly, average rents of luxury condominiums tracked by Savills dipped 0.1 percent quarter-on-quarter and 0.6 percent year-on-year to $4.85 psf per month.
The marginal decline in high-end rents was also observed by Jones Lang LaSalle, which added that capital values in this segment fell by 0.6 percent quarter-on-quarter due to the TDSR framework.
Moving forward, leasing transactions may drop due to a shrinking pool of overseas nationals as more employment measures are imposed.
“Similarly, rents in some locations may continue to see a correction, particularly in the mass-market segment, due to strong competition from new supply, as well as smaller rental budgets amid the rising cost of living in Singapore,” added the consultancy.
Nonetheless, HDB’s recent rules on sub-letting entire flats to non-citizens (PRs and overseas nationals, excluding Malaysians) could soften the blow in the city fringe and suburban areas.