Concerns about leasing affordability in Singapore’s rental market have been rising since the start of 2022. Market watchers predicted a hike in rental prices and since then, the rental market has been favourable for landlords, much to the frustration of many tenants in Singapore — both locals and foreigners.According to Alan Cheong, executive director of research and consultancy at Savills Singapore, landlords and tenants can expect most of the rental increases this year to occur in the first six months. URA data reveals that the non-landed private residential rental index went up by 30% y-o-y in 2022.

The cause of the heated rental market is a relatively low stock of rentable properties, especially in the CCR and CBD, where new residential project completions have been relatively low over the past year or so. As a result, some tenants who used to lease apartments in the CCR have had to look further afield in other regions for affordable properties.

This has led to some families with children being hard-hit by this change, as they have to look for more affordable housing options in suburban areas. A possible consequence of higher rents in prime and central neighbourhoods could be a negative impact this could have on Singapore’s overall competitiveness as an attractive global city for foreign talent.

Interestingly, despite higher rents, landlords have been able to find replacement tenants who are willing to pay the elevated prices. The steady rental demand in recent months is attributed to several multinational corporations that are, or will be, setting up offices in Singapore.

On the other hand, rental demand for landed homes such as bungalows and Good Class Bungalows has noticeably fallen in the last few months, due to the low supply of these premium homes in Singapore.

Looking ahead, Ong believes that on-the-ground enquiries for apartments will remain more or less the same for the rest of this year. “Many more expats are expected to arrive in Singapore for work, which will fuel demand in the local rental market,” she says.

The cause of the heated rental market in Singapore has been a relatively low stock of rentable properties, especially in prime and central neighbourhoods. According to Alan Cheong, executive director of research and consultancy at Savills Singapore, this mismatch between available rental supply and incoming tenant demand is pushing up rental prices.

URA data reveals that the non-landed private residential rental index went up by 30% y-o-y in 2022, stimulating the market in recent months. This has forced some tenants who used to lease apartments in the CCR to look further afield in other regions for affordable properties.

Effectively, higher rents in prime and central neighbourhoods could have a negative impact on Singapore’s overall competitiveness as an attractive global city for foreign talent. However, landlords have largely been able to find replacement tenants who are willing to accept the higher rents and the steady rental demand is attributed to several multinational corporations that are, or will be, setting up offices in Singapore.

Altura EC to launch in Q2 2023 and is Altura EC Bukit Batok expected to attract strong demand from first-time buyers and HDB upgraders due to affordable pricing of S$3,500 per sq ft.

Rental demand for landed homes such as bungalows and Good Class Bungalows has, however, noticeably fallen in the last few months due to the low supply of these premium homes in Singapore.

Moving forward, Cheong believes that the trend of the rental market is expected to be more subdued moving forward. In fact, any increase in rents is likely to be front-loaded into the first two quarters of this year and that rents may even soften in the second half of this year.

Tenants should take solace in this projection as market watchers look forward to the rental market calming down in the coming months.