The average monthly gross rents of luxury/super-luxury apartment could decline by about 5 percent for the whole of 2014.
According to a recent research and forecast report by Colliers International, rents for these units have fallen 3.9 percent over the January to September period this year.
Specifically, it fell 0.5 percent quarter-on-quarter to $5.17 per sq ft per month as of Q3 2014, following the 1.4 percent quarter-on-quarter decline in Q2 2014.
“While tenants continued to enjoy stronger negotiating powers in light of the many choices available in the market, well-maintained and attractively-located homes were able to hold rents,” the report said.
The average capital value of luxury and super-luxury apartments softened by a steeper 2.1 percent quarter-on-quarter following Q2 2014’s 1.1 percent fall to $2,584 per sq ft. This is because acute affordability concerns is proving to be a formidable push factor.
For the last quarter of the year, Colliers International predicts leasing activities generally tend to slow down over the October to December year-end festive season. “With a mounting supply of high-end apartments vying for a limited pool of tenants amid an increasingly competitive leasing environment, this may exert further downward pressure on rents in Q4 2014,” the report said.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
