Private home rents edge up 0.5% in October as leasing activity slows for third consecutive month

Leasing activity for non-landed private residential properties in Singapore slowed for the third consecutive month after peaking in July this year, falling from 7,456 units rented out in August to 5,712 units in October. Following a dip in September, private residential rents edged up by 0.5% in October. 

Flash estimates show that overall private residential rents rose by 0.5% month-on-month in October, but fell by 2.8% year-on-year.

Rents in the Core Central Region (CCR), representing luxury private homes, and the Rest of Central Region (RCR), representing mid-tier private homes, recorded month-on-month increases of 0.5% and 0.8% respectively, while rents in the Outside Central Region (OCR), representing mass-market private homes, remained unchanged month-on-month.

Compared to the same period last year, non-landed private residential rents fell across all regions, with declines ranging from 2.3% to 3.9%. Luxury private homes in the CCR saw the sharpest decline, while those in the OCR saw the smallest drop; rents in the RCR slipped by 3.3%.

After bottoming out in May this year, private residential rents rose by 1.4% between June and October, indicating that rents are charting a steady upward recovery.

According to flash data, rents in the CCR climbed at the fastest pace between June and October at 2.4%, while OCR private residential rents rose by just 0.4%.

Increase in Luxury Private Home Leases in October Lifts Overall Rents

Although private residential leasing transactions have fallen for three consecutive months, the uptick in rents was likely driven by a higher proportion of luxury homes leased in October, which lifted overall rental figures. Flash data shows that rental transactions in the CCR accounted for 30.4% in August, rising to 32.2% in October.

In terms of overall private home rental volume, transaction volume in October was 7.5% lower than the 6,172 units leased in September, but represented a 5.3% increase year-on-year. The OCR remained the most active market, accounting for 34.8% of transactions, while the RCR accounted for 33%.

Looking at the full-year performance of the private residential rental market, it is expected to remain largely flat overall.

With 3,700 new units slated for completion in the fourth quarter, private residential rental growth is expected to moderate, with properties in the CCR facing the greatest pressure. Competition among landlords for tenants will intensify, and more foreign tenants may seek more affordable options outside the central area.

Meanwhile, HDB rents matched the private residential market with a 0.5% increase in October. However, the number of HDB flats rented out rose by 2.9% month-on-month to 2,398 units, though this was a significant 16.1% drop compared to the same period last year.