November private home rental volume down 12.3% m-o-m, rents edge up 0.2%

As property market activity tapered off towards the year-end, Singapore's non-landed private residential leasing volume dropped for the fourth consecutive month in November. Meanwhile, amid fewer new private home completions and tightening supply, rents edged up by 0.2% in November compared to October.

Flash estimates for November revealed that non-landed private residential rental volume fell 12.3% month-on-month (MoM) to 5,010 units. This marks the lowest rental volume recorded since the peak in July this year, when 8,136 private residential units were leased.

The rental volume figures for November reflect a private residential rental market that is stabilising rather than continuously weakening.

This is because, over the past 12 months—excluding the July peak—leasing volume has ranged between 4,790 and 7,450 units, and November's volume remains comfortably within this band. Moreover, July's high of 8,136 units was exceptionally elevated and unsustainable.

Many expatriates had progressively renewed their leases since July. With more expatriates heading home for the year-end holidays, leasing activity is expected to remain quiet in December.

However, SRX data from the past two years showed that rental volumes in December surpassed those in November, indicating that some expatriates choose to secure tenancy agreements before the new year to lock in their accommodation.

Demand from new tenants saw little growth, though some HDB or co-living space tenants took advantage of the narrower rental gap to switch to private homes.

Only OCR private home rents posted month-on-month growth

Looking at rental trends across submarkets, while overall private home rents rose 0.2% MoM in November, prime non-landed homes in the Core Central Region (CCR) and city-fringe homes in the Rest of Central Region (RCR) saw rents slip by 0.6% and 0.1% respectively. Only mass-market homes in the Outside Central Region (OCR) posted a monthly rental increase of 0.8%.

On a year-on-year (YoY) basis, overall private residential leasing volume increased by 0.8%, while rents fell by 1.3%.

Based on trends over the past year, non-landed private residential rents are stabilising. Private home rents had been falling from November last year to June this year before halting their decline and edging up slightly, signalling that the private rental market is beginning to shift from a tenant's market to a landlord's market.

With the pace of US interest rate cuts potentially slowing next year, landlords will need to maintain higher asking rents to cover their mortgage repayments, which will support rental levels.

Analysts: Private home rental growth projected to be flat or up to 3% next year

With fewer new private home completions this year and next, rental growth next year is projected to remain flat or rise by up to 3%.

Should the local job market soften, tenants may opt to rent in the RCR or OCR to rein in accommodation costs, and some may even consider renting HDB flats.

The rental market is expected to sustain its recovery in 2025. Driven by an improving macroeconomic environment, job creation, and tight private rental supply, rental growth could range between 2% and 4%.

In the public housing segment, HDB rental volume declined 13.8% MoM in November, with approximately 2,155 HDB flats rented out, while rents rose 0.4% MoM.