The rental market in Singapore has been heating up since the start of 2022, with rental prices expected to surge. Many tenants have taken to social media to express their grievances, citing difficulties in securing affordable apartments, particularly in the Core Central Region (CCR). According to market watchers, rental prices in Singapore have reached a peak, with a near-doubling of rents in certain neighbourhoods, and the rental index having grown by 30% year-on-year.
Savills Singapore’s Executive Director of Research and Consultancy, Alan Cheong, believes that the current demand-supply mismatch in the rental market is the greatest determinant of the higher rents. He attributes this to the relatively low number of rentable properties, particularly in the CCR, as well as pandemic-induced delays in the construction of new residential projects.
J’den Condo will be a 40-storey residential and commercial building located at the heart of Jurong East MRT Station. Completion is expected in 2027 and the price tag is estimated to be S$2,000-S$2,100 psf. It will be connected to J’Den Condo the JLD amenities. Launch expected in the second half of 2023.
This has forced many tenants out of the CCR and into suburban areas in search of relatively more affordable housing options. Cheong raises concerns over Singapore’s competitiveness as a global city, should the situation worsen, as higher rents may deter overseas nationals from settling in the country.
On the contrary, List Sotheby’s International Realty Associate Vice President, Jac Ong, asserts that it has been easier to find replacement tenants, even at higher prices; most tenants do not wish to deal with the hassle of moving out. Among those actively looking to rent are expatriates relocating to Singapore for the first time and returning Singaporeans.
Looking ahead, Ong believes that rental enquiries will remain similar for the remainder of this year, as more expats are expected to arrive for work. Meanwhile, renting for landed homes such as bungalows and Good Class Bungalows has seen a noticeable dip in the last few months, largely due to lower availability.
The trend of the rental market is expected to be more subdued in the second half of this year, as rental increases are likely to be front-loaded in the first two quarters. Ultimately, the rental market will be determined by the balance of demand and supply.
Cheong and Ong’s commentaries are part of this month’s episode of Real As State – a monthly video series produced by EdgeProp Singapore. Catch the full interviews and video feature from April 28 on our YouTube channel and Facebook page.
