2024 Forecast for Private Non-Landed Residential Rental May Drop To 5% Year-on-Year

Savills Research forecasts that strong economic headwinds may see the private non-landed residential rental market dropping to 5% year-on-year (YoY). Although landlords may resist lowering rents due to significant increases in property taxes, the momentum from the influx of around 18,000 units of new completions and continued economic headwinds may lead to rents falling slightly more than what was projected in the third quarter last year.

Rents for non-landed properties continued falling in the fourth quarter of 2023. After eliminating outliers*, rents for non-landed properties fell by 1.55% quarter-on-quarter (QoQ) for all bedroom types (1 to 5 bedrooms). The change in the third quarter was 0.2%.

Rents fell across all the market segments, by 1.5% in the Core Central Region (CCR), 0.8% in the Rest of Central Region (RCR) and 2% in the Outside Central Region (OCR). For the more popular rental types (1-to-3 bedroom units), the dip in rents was smaller QoQ at 1.1% with the CCR falling 0.8%, and the RCR and OCR falling 1.1% and 1.3% respectively.

On a quarterly basis, the average** median rents dropped the most for 4-bedroom units (3.9%), followed by the 1-bedroom (1.8%) and 3-bedroom (1.7%) units.

On a YoY basis, average rental rose slower at 4.8% in 2023, compared with 6% in 2022. The RCR rose the most by 5.3%. Next was the OCR at 5%, followed by the CCR at 3%.

Excluding outliers, Q4’s top three districts’ median rental for a 3 bedroom*** were unchanged from Q3. In first place was District 1 (Boat Quay/Marina/Raffles Place) where the Q4 median rent was the highest at $9,000 per month, followed by District 4 (Harbourfront/Telok Blangah) at $8,500 and District 9 (Orchard/River Valley) at $7,650. In Q3, District 1 was also the highest at $9,500 followed by District 4 at $8,825 and District 9 at $8,000.

In Q4, the median rents for 3-bedroom units in District 7 (Beach Road/Bugis/Rochor) and District 12 (Balestier/Toa Payoh) increased by 6.45% and 4.79% respectively. District 7 rose from $6,200 in Q3 to $6,600 in Q4, whilst District 12 increased from $4,700 in the third quarter to $4,925 in the fourth quarter.

Alan Cheong, Executive Director, Research & Consultancy, Savills Singapore comments, “In 2023, rental declines for all non-landed private residential properties in the fourth quarter led to a full year growth of 4.8%. If we include outliers, rents went up 6%. The momentum built up in the first half of last year was the reason for this scenario playing out. While higher property taxes paid in 2024 may add some friction to slow down the rate of decline of rents for private residential properties, economic headwinds are now blowing stronger. We believe that non-landed private residential rents may decline 5% YoY in 2024.”

George Tan, Managing Director, Livethere Residential, Savills Singapore says, “With a lower rate of increase, we see better value for tenants, with the same amount of rent they pay. There is less of a rush to secure a home. For landlords, what’s important is to have a good long-term tenant who is able to afford the rent and take care of the property.”

View the Q4 2023 Rental Guide image here.