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Rents for high-end condominiums up 7.6% q-o-q in 2Q2022: Savills

/ EdgeProp Singapore |

September 6, 2022 12:00 PM SGT

Monthly rents for high-end non-landed private residential projects surged 7.6% q-o-q in 2Q2022 to reach $4.79 psf (Picture: Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - Monthly rents for high-end non-landed private residential projects surged 7.6% q-o-q in 2Q2022 to reach $4.79 psf, the highest quarterly increase since 1Q2014, according to a research report by Savills Research. This also marks the sixth consecutive quarter of growth in monthly rents for high-end condos tracked by the firm.

According to data released by URA, rentals of private residential properties rose 6.7% q-o-q in 2Q2022, registering a seventh consecutive quarter of growth, underpinned by higher rents for both landed and non-landed properties. Rentals of landed properties rose 3.2% q-o-q, while rentals of non-landed properties grew 7.1% q-o-q.

For non-landed properties, rents in the Core Central Region (CCR) and Outside Central Region (OCR) grew 7.7% q-o-q. Rents of non-landed homes in the Rest of Central Region (RCR) rose 5.9% q-o-q.

The rent increase comes despite a decline in leasing volume for private residential properties for a third consecutive quarter. In 2Q2022, 20,751 leasing transactions were recorded, a decrease of 8.7% q-o-q. “This contraction in leasing volume does not indicate slower rental demand, but it may be due to limited completions, affected by construction delays,” the report explains.

Leasing volumes of private non-landed homes fell 8.7% q-o-q to 19,545 transactions in 2Q2022, with non-landed homes in CCR registering the most significant decline of 13.3% q-o-q to 5,780 transactions. RCR and OCR declined by 6.2% and 7.1%, respectively. Savills Research notes that the decrease in CCR may be due to less available stock. It adds that higher rents have pushed tenants to seek cheaper accommodation by moving to less prime locations.

Meanwhile, leasing volumes of private landed homes contracted 7.7% q-o-q to 1,206 transactions in 2Q2022. The vacancy rate for private residential properties increased by 0.1 of a percentage point (pp) to 5.4% in 2Q2022, reversing two consecutive quarters of decline. The reversal is underpinned by new completions in non-landed private homes of 2,682 units, more than triple the 819 units recorded in the previous quarter. This boosted the vacancy rate of non-landed private homes to 5.6%. Meanwhile, the vacancy rate of landed homes remained unchanged at 4.7% in 2Q2022.

Across regions, the CCR was the only segment that saw a decline in the vacancy rate, falling by 0.7 of a pp to 7.4%. Vacancy rates in the RCR and OCR rose 0.5 of a pp and 0.2 of a pp to 6.6% and 3.8%, respectively, in 2Q2022.

Looking ahead, Savills Research points out that private home rents have already increased 11.7% in the first half of the year. It has revised its y-o-y rental growth projections for 2022 upwards, from a forecasted range of 10% to 15% to a higher range of 15% to 20%. “For 2023, rental increases are likely to continue with a 5% y-o-y rise,” the report adds.

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