An increased supply of private homes is expected to hit the market by 2020.
With this looming, combined with lower levels of hiring, the private home rental market may face some challenges this year.
Rental sector hits a 5-year low after 3 quarters of positive growth
Following 3 consecutive quarters of positive growth in the private home rental segment, their winning streak came to an end last quarter with rates declining 1%.
Despite vacancy rates in private home rental market hitting a 5-year low last quarter and an overall 0.6% increase in private home rents last year, analysts are concerned that 2019 may be a quiet year for this market segment.
Rents of non-landed private residential properties fell by 0.8% last quarter, compared to the 0.3% rise in Q3.
Over the year, however, rental prices here rose 0.4%. Rents of landed properties rose 2% in 2018, but fell 2.1% in the last quarter, following Q3’s growth of 0.5%.
Improving vacancy rates, however, points to recovering leasing market
The number of un-tenanted private homes in the market has however hit a 5-year low last year.
Vacancy rates of completed private homes last quarter in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) stood at 7.9%, 7.4% and 5.1% respectively. This was an improvement from Q3’s 10.4%, 8.1% and 4.5%.
Singapore remains attractive to global brands and multi-national companies for her political stability, effective infrastructure and pro-business environment.
Dyson recently announced the move of its headquarters here. This could be good news for the local rental market despite an upcoming influx of completed private homes into the market within the next couple of years.
Foreign hiring policies, however, have tightened over the past year, and with global geopolitical uncertainty, hiring seems unlikely to increase by leaps and bounds this year.
How will this impact the rental market here?
Some landlords may be eager to close deals ahead of the looming supply escalation, but analysts are expecting a quieter rental market this year with prices remaining relatively stable.