: URAThe rental market for private homes may see flat growth this year, despite a modest rebound in the fourth quarter of 2024. According to a report by Savills Singapore, the first full-year decline since 2020 is expected, as the non-landed private residential market recorded a 1.7% drop in rents over the whole of 2024.19,733 leasing transactions were made in the last three months of 2024, a 24.2% decrease from the previous quarter. Savills attributes this decline to a decrease in rental demand from the decrease in employment pass and S pass holders, as well as a year-end seasonal slowdown in rental activity.However, there is still some growth in rental demand, and rents in the private residential market have stabilised, says George Tan, managing director of Livethere Residential at Savills. Suburban areas offer more affordable rents, which appeal to tenants seeking lifestyle options such as spacious units, easy access to transportation and shopping, and recreational activities.The top location for the most number of leasing deals in the fourth quarter of 2024 was Parc Esta, a 1,399-unit development in District 14, with 163 rental transactions at a median monthly rent of $6.84 per square foot. Other developments with high rental transaction numbers include Marina One Residences, The Sail @ Marina Bay, Normanton Park, and D’Leedon.Rental prices in the Outside Central Region (OCR) were the only ones to decline by 0.8% in the fourth quarter, while rents in the Core Central Region (CCR) and Rest of Central Region (RCR) rose by 0.9% and 0.3%, respectively. This may be due to more tenants in suburban areas moving to more central neighbourhoods with more reasonable rents.High-end condo rents also saw a slight rebound in the fourth quarter, increasing by 1.7% to $5.85 per square foot, based on a basket of luxury properties tracked by Savills. However, landlords are expected to face challenges in the rental market as companies continue to hire fewer expats, and increased property taxes and conservancy charges due to inflationary pressures may lead to higher costs.Looking ahead, the rental market is expected to face headwinds in 2025 due to fewer new completions of private homes and higher property taxes on investment properties that deter landlords from accepting lower rental rates. Additionally, the adoption of AI in some high-tech firms may reduce the demand for white-collar professionals, potentially reducing the pool of expat tenants. Cheong also believes that interest rates will take longer to fall, resulting in mortgage payments remaining at current levels for longer.
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