Condo rents dip 1.3% y-o-y in 1Q2024 track to fall 5% year: Savills
Singapore condo rents have fallen from a year ago, according to data compiled by Savills Research. In its 1Q2024 Rental Guide released on May 7, the consultancy highlights that average rents for private non-landed properties contracted 1.3% y-o-y in 1Q2024, in contrast with the 4.8% surge recorded in 1Q2023.
Excluding outliers, Savills says condo rents fell by 1.8% q-o-q, extending the 1.5% quarterly decline logged in 4Q2023. Savills’ rental guide, which tracks average median rents for three-bedroom condo units across the island, indicates that District 2 — covering the Chinatown and Tanjong Pagar areas — saw the biggest drop in rents, falling 12.3% compared to the previous quarter to $6,800 per month.
District 5, spanning the Buona Vista, West Coast and Clementi areas, saw the second-biggest quarterly drop at 8.6% to $5,300 per month, followed by District 3, covering the Alexandra and Commonwealth areas, which fell 6.1% to $6,200 per month.
Elsewhere, Savills notes that rents have continued to soften in District 1, which covers the Boat Quay, Marina Bay and Raffles Place areas. The district had an average median monthly rent of $8,500 for a three-bedroom unit, compared to $9,000 the previous quarter.
On the other hand, average median rents for three-bedroom units rose in District 7 (Beach Road, Bugis and Rochor), District 26 (Mandai and Upper Thomson) and District 11 (Newton and Novena). District 7 saw rents grow 9.8% q-o-q to $7,250 per month; while rents in District 26 grew 8.5% to $4,450 per month. Rents in District 11 grew 8.2% q-o-q to $6,600 per month.
Despite the mixed movements, Alan Cheong, executive director for research and consultancy at Savills Singapore, observes that overall, rents have adjusted downwards “in a well-mannered fashion” in recent months, with gradual declines across unit types.
While average median rents for three-bedroom units have seen the biggest drop, rents for one- and two-bedders — which are popular among renters — are also falling. Altogether, rents for one- to three-bedroom units slid 2.1% q-o-q in 1Q2024, led by the Rest of Central Region which fell 3.5%, followed by the Outside Central Region (down 1.8%) and the Core Central Region (down 1.4%).
Cheong sees the easing rents in line with Savills’ projection for the full year, as new supply of condo units is expected to continue putting downward pressure on rents. Savills is forecasting private residential rents to fall 5% y-o-y for the whole of 2024.
Singapore has seen a decline in condominium rental prices over the past year, according to data from Savills Research. The company’s 1Q2024 Rental Guide, released on May 7, revealed that rental prices for private non-landed properties decreased by 1.3% year-on-year in 1Q2024, a contrast to the 4.8% rise that was seen in 1Q2023.
Savills noted that when excluding outliers, condominium rental prices dropped by 1.8% quarter-on-quarter, a continuation of the 1.5% decline seen in 4Q2023. The company’s rental guide, which tracks the average median rents for three-bedroom units across Singapore, found that District 2, which includes Chinatown and Tanjong Pagar, experienced the largest decrease in rental prices, falling by 12.3% from the previous quarter to $6,800 per month.
Following closely behind was District 5, which includes Buona Vista, West Coast, and Clementi, with an 8.6% decrease to $5,300 per month, and District 3, which consists of Alexandra and Commonwealth, with a 6.1% decrease to $6,200 per month.
However, not all districts experienced a decline in rental prices. Savills noted that District 1, which includes Boat Quay, Marina Bay, and Raffles Place, has seen a gradual softening of rental prices, with a median monthly rent of $8,500 for a three-bedroom unit in 1Q2024, a decrease from $9,000 in the previous quarter.
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The company also found that three-bedroom unit rental prices have increased in District 7, which includes Beach Road, Bugis, and Rochor, by 9.8% quarter-on-quarter to $7,250 per month. In addition, District 26, which includes Mandai and Upper Thomson, saw an 8.5% increase to $4,450 per month, and District 11, which includes Newton and Novena, saw an 8.2% increase to $6,600 per month.
Despite these varying trends, Alan Cheong, executive director for research and consultancy at Savills Singapore, noted that overall, rental prices have decreased in a gradual and controlled manner over recent months, with all types of units experiencing a decline.
Cheong also mentioned that these decreasing rental prices align with Savills’ projections for the entire year, as the influx of new condo units is expected to continue exerting downward pressure on rental prices. The company forecasts a 5% year-on-year decrease in private residential rents for 2024.
In conclusion, while there may be fluctuations in the rental market, it is expected to continue favoring tenants due to the continued growth in supply of condo units. As a result, rental prices are projected to decrease for the remainder of the year.