Rental Market Heats Up Again! Landlords Stand Firm: Units Still Letting Out Without Rent Cuts

Singapore's private residential leasing market remains active. Latest data shows that overall leasing volume and non-landed private home rents rose for the second consecutive quarter in Q2 this year, up 2.8% and 0.8% quarter-on-quarter (Q-o-Q) respectively. Although the pool of available rental units has expanded, landlords have generally remained firm on their asking rents against the backdrop of higher property taxes and inflation-driven maintenance fees.

Core Central Region Rents Continue to Climb

The report revealed that rents in the Core Central Region (CCR) and Outside Central Region (OCR) climbed 1.8% and 0.1% Q-o-Q respectively in Q2, driving overall rental growth; rents in the Rest of Central Region (RCR) held steady from the previous quarter.

 Across unit types, the median rent in the CCR rose 2.8% Q-o-Q, with most layouts recording gains and only one-bedroom units seeing a slight softening. This reflects the increased influx of compact apartments since last year, intensifying landlord competition and prompting some to trim asking rents to attract tenants.

Demand for Larger Units Softens

In contrast, demand for larger configurations such as five-bedroom units has eased, with some tenants shifting to three- or four-bedroom homes amid budget realignments.

Overall, the Outside Central Region (OCR) remained the most active segment for non-landed private home rentals, with Q2 leasing volume climbing 4.1% Q-o-Q; leasing volumes in the CCR and RCR also expanded by 3% and 2.2% respectively.

Sharp Rental Corrections Unlikely

While US tariff policies introduce uncertainty to corporate expansion and hiring plans—which could weigh on rental demand to some degree—rents are expected to remain resilient. Barring a marked deterioration in macroeconomic conditions or geopolitical tensions, a sharp drop in rents is unlikely. Higher property taxes and management expenses give landlords compelling reasons to hold firm on their asking rents.

Vacant Stock on the Rise

Even as leasing demand held up, the number of vacant units breached the 30,000 mark in Q2, rising 10.5% Q-o-Q. Over 60% of these were located in the OCR, with the remainder spread across the RCR and CCR.

This is primarily attributable to a slower pace of leasing absorption in newly completed projects, as well as tenant preferences for superior locations and modern amenities. Data indicates that among non-landed private homes completed since Q3 last year, only 21.3% of units have been successfully tenanted.

Market Outlook

Analysts project that available rental supply will increase further in the second half of the year as more completions enter the market. Nonetheless, in view of the tax burdens and inflationary pressures borne by landlords, full-year private residential rents are unlikely to experience any significant retreat, with the market expected to stay range-bound or register modest gains.