Singapore’s residential leasing market is set to record stellar growth this year with the number of leases between January to October 2012 at 42,139 – just 2,923 leases below last year’s 45,062, according to a Savills report.
The year’s total is expected to reach about 48,000 as average leasing deals in November and December historically stand at 3,000 per month.
However, the number of vacant properties across Singapore rose 32 percent to 16,877 in Q3 2012 compared to Q1 2011’s 12,740, bringing the vacancy rate up to 6.1 percent from 4.1 percent. As of Q3 this year, the number of vacant condominium units stands at 14,198 and vacant houses at 2,679 units.
The vacancy rate in the Central region was 7.9 percent in Q3 – still higher than the five-year average of 7.5 percent, while the western and eastern regions were at four and 4.5 percent in the same period, higher then the 3.6 and 3.5 percent five-year averages respectively. The rise in vacancy rates correlated with a spike in condo completions in those areas.
Moreover, median rents of condos and apartments (excluding ECs) hit a new record of S$3.75 psf per month in October. In contrast, median rents for houses fell by 0.4 percent month-on-month to S$2.65 psf per month, while rents for luxury condos fell by 1.4 percent to S$4.88 psf per month in Q4 from the previous quarter.
Nonetheless, demand for mass market homes is increasing and is expected to remain healthy throughout 2013 thanks to the tighter rental budgets of new entrants.
“Constrained rental budgets have led tenants to search for smaller homes, either singularly or sharing, driving up rents on a per-sq-ft basis,” said Alan Cheong, Research Head at Savills Singapore.
Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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