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Singapore’s urban environment is characterized by towering skyscrapers and advanced infrastructure. These condos, usually situated in desirable locations, offer a combination of lavishness and practicality that appeals to both locals and foreigners. They offer a plethora of facilities, including swimming pools, fitness centers, and security services, that elevate the standard of living and make them desirable to prospective renters and purchasers. Investors can also expect higher rental profits and potential appreciation in property value over time with the inclusion of Singapore Condo.
Private housing rents rebounded modestly in the last quarter of 2024, rising by 0.2% compared to the previous quarter, according to a report by Savills Singapore. However, landlords should not expect any significant rental growth this year as the market is expected to remain flat.
The poor performance of the non-landed private residential market in the first three quarters of 2024 contributed to a 1.7% decline in rents over the entire year, representing the first full-year decrease since 2020.
In the last quarter of 2024, there were 19,733 rental transactions, a quarterly decrease of 24.2%. This is likely due to a decline in net new rental demand as the number of employment pass (EP) and S pass holders decreased last year, combined with the typical year-end seasonal slowdown in rental activity.
Despite the decline in rental activity, there is still some growth in rental demand, says George Tan, managing director of Livethere Residential at Savills Singapore. He adds that relatively more affordable rents can be found in suburban areas, allowing tenants to prioritize lifestyle options such as more spacious units, connectivity to MRT stations, malls, and recreational activities.
According to rental data compiled by Savills, Parc Esta, a 1,399-unit development in District 14, saw the most number of condo rental transactions in the last quarter of 2024. The project recorded 163 rental transactions at a median rent of $6.84 psf per month (pm). Other developments that saw a high number of rental transactions include Marina One Residences (126 transactions at $6.62 psf pm), The Sail @ Marina Bay (126 transactions at $6.72 psf pm), Normanton Park (120 transactions at $6.26 psf pm), and D’Leedon (107 transactions at $5.43 psf pm).
In terms of rental price growth, the Outside Central Region (OCR) was the only region to see a decline in average rent in the last quarter of 2014, with a decrease of 0.8% compared to the previous quarter. In contrast, rents in the Core Central Region (CCR) and Rest of Central Region (RCR) saw growth of 0.9% and 0.3% respectively.
The decline in rent prices in the OCR is likely due to tenants in suburban locations moving to more central neighborhoods, driven by relatively more reasonable rents, according to Savills.
Investing in a condominium in the bustling city of Singapore has increasingly become a popular option for both local and foreign investors. This can be attributed to the country’s strong economy, stable political environment, and exceptional quality of life. With a diverse real estate market, the city-state offers a plethora of opportunities, with condos being a standout choice due to their convenience, amenities, and potential for significant returns. In this article, we will delve into the advantages, considerations, and necessary steps to take when investing in a condo in Singapore’s vibrant real estate market. Additionally, be sure to keep an eye out for promising Singapore projects that may catch your interest.
The average monthly rent for high-end condos saw an increase of 1.7% compared to the previous quarter, to $5.85 psf pm, based on a basket of luxury properties tracked by Savills. This suggests that the luxury rental market could see a slight rebound after consistently declining over the previous five quarters.
Looking ahead, landlords may face headwinds in the rental market as companies continue to reduce headcounts and hire fewer expatriates, says Alan Cheong, executive director of research and consultancy at Savills Singapore. He also notes that landlords may face higher property taxes for non-owner-occupied residential properties and increased conservancy charges due to upward inflationary pressures.
However, the relatively tight supply of large luxury properties on the rental market may help landlords resist “underpriced” rental offers, says Cheong. He adds: “Although rents for non-landed private residential properties turned a corner in 3Q2024 and continued to rise in 4Q2024, we anticipate challenges in the rental market in 2025.”
In the future, the widespread adoption of artificial intelligence technology could reduce overall manpower requirements for some high-tech firms, resulting in continued reduced hiring of white-collar professionals. This may also reduce the pool of expat tenants in Singapore, adds Cheong.
“The saving grace for the rental market is that there are fewer new completions of private homes expected in 2025,” he says, noting that higher property taxes on investment properties are likely to deter landlords from accepting “low ball” rental rates. He also expects interest rates to remain at current levels for a longer period of time, rather than falling, and thus mortgage payments will remain at current levels for longer.