Condo rents dip 1.3% y-o-y in 1Q2024 track to fall 5% year: Savills
According to data compiled by Savills Research, rents for Singapore condos have decreased compared to a year ago. The consultancy released their 1Q2024 Rental Guide on May 7, revealing a 1.3% year-on-year decline in average rents for private non-landed properties. This is a stark contrast to the 4.8% surge seen in 1Q2023.
Excluding extreme outliers, Savills notes that condo rents have fallen by 1.8% quarter-on-quarter, continuing the 1.5% decline seen in 4Q2023. Their rental guide, which tracks the median rents for three-bedroom units across the island, shows that District 2 – which includes Chinatown and Tanjong Pagar – saw the biggest drop in rents, falling by 12.3% compared to the previous quarter to $6,800 per month. District 5, which encompasses Buona Vista, West Coast, and Clementi areas, saw the second-highest quarterly decline of 8.6% to $5,300 per month, followed by District 3, covering the Alexandra and Commonwealth areas, which fell by 6.1% to $6,200 per month.
On the other hand, rents have continued to soften in District 1, which includes Boat Quay, Marina Bay, and Raffles Place. The district had an average monthly median rent of $8,500 for a three-bedroom unit, compared to $9,000 in the previous quarter. However, average median rents for three-bedroom units have risen in District 7 (Beach Road, Bugis, and Rochor), District 26 (Mandai and Upper Thomson), and District 11 (Newton and Novena). District 7 saw rents grow by 9.8% quarter-on-quarter to $7,250 per month, while rents in District 26 climbed by 8.5% to $4,450 per month. Rents in District 11 rose by 8.2% quarter-on-quarter to $6,600 per month.
Despite the mixed movements, Alan Cheong, executive director for research and consultancy at Savills Singapore, notes that rents have generally decreased in recent months in a gradual and respectful manner, across all types of units. While average median rents for three-bedroom units have seen the biggest drop, rents for one- and two-bedders – which are popular among renters – are also decreasing. Overall, rents for one- to three-bedroom units dropped by 2.1% quarter-on-quarter in 1Q2024, led by the Rest of Central Region which saw a 3.5% decrease, followed by the Outside Central Region (down 1.8%) and the Core Central Region (down 1.4%).
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Cheong believes that the decrease in rents is in line with Savills’ predictions for the full year, as the influx of new condo units is expected to continue putting downward pressure on rents. They are forecasting a 5% year-on-year fall in private residential rents for 2024.
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