Bucking the trend of a slowdown in Singapore residential sales, rental volumes surged 12.2 percent quarter-on-quarter to reach a high of 15,053 transactions in Q2 2014, according to a Savills report.
Year-on-year, this is a growth rate of 5.2 percent.
For the first six months of 2014, a total of 28,464 leases were secured, a 5.9 percent increase compared with 26,887 leases during the same period last year.
This comes despite earlier expectations of a shrinking pool of overseas nationals following tighter immigrations policies in the city-state.
“A possible reason for the healthy leasing demand could be the influx of foreigners who brought forward their plans to relocate here, fearing more moves to tighten immigration,” said Savills.
The report added: “Employers might have also made a last dash to expedite their applications for employment pass holders before the Fair Consideration Framework (FCF) comes into force in the third quarter.”
Meanwhile, rental prices continued sliding for a third straight quarter, with the URA rental index easing by 0.6 percent.
In both the Core Central Region (CCR) and Rest of Central Region (RCR), rents slipped by 0.1 percent, while the OCR (Outside Central Region) saw a bigger dip of 0.9 percent.
Specifically, average monthly rents of high-end condominiums tracked by Savills fell 1.6 percent quarter-on-quarter to $4.77 psf.
“This downward pressure is likely the result of the intense competition created by an increased supply of newly-completed developments in the central area and a reduced pool of big-budget tenants as housing budgets are shrinking,” noted the report.
Moving forward, Savills expects leasing demand to remain strong as Singapore upholds its ranking as one of the top destinations for overseas nationals.
But rents will remain soft across all market segments as the increasing housing stock of some 8,066 completed new private units by end-2014 will shift bargaining power in favour of tenants.
Romesh Navaratnarajah, Singapore Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
