Singapore’s rental price growth slowed in the second quarter, cooling a years-long boom that has sapped affordability and threatened to dent the city-state’s appeal as a finance hub.
An index of private residential prices rose 2.8 per cent from the previous three months, the smallest gain since 2021, Urban Redevelopment Authority figures show.
The growth in rental costs is expected to ease further as new units become available. About 20,000 private housing completions are due this year alone – the highest annual supply since 2017. Government measures have also helped relieve the spike in rents that has rattled tenants.
“Even expatriates with accommodation allowances were reconsidering their leasing options, as the cost of living in Singapore had grown exceptionally,” said Nicholas Keong, head of residential and private office at Knight Frank Singapore. He expects rental prices to further ease in the remainder of this year with “the steady completion of new inventory.”
Island-wide leasing contracts for private apartments over the past three months were at the lowest since the start of the pandemic, with April and May volumes down 9.2 per cent from a year ago, according to Knight Frank.
The high-end market, in particular, has seen the biggest reversal. Rents in the ultra-luxury segment slumped almost 4 per cent in the second quarter, against the 9 per cent gain in the previous quarter, according to Knight Frank’s analysis of Urban Redevelopment Authority data.
The government’s latest cooling measures – doubling stamp duties for foreigners to 60 per cent – have also deterred potential investors, leading to lower demand for luxury rentals, she said.
Since the pandemic, the city-state has largely defied a global property slowdown as an influx of wealth from China and other countries fanned the market. Singapore tied with New York for the city with the fastest pace of rental growth at one-point last year and recently slid to second spot.
Meanwhile, discontent over renting costs has become a political problem. Although rental hikes have impacted expats more acutely since they are less likely to own homes, a survey last year showed that two in three Singaporeans between the ages of 22 to 29 are choosing to rent due to insufficient savings. A YouGov poll last month found that more than half of respondents think the government needs do more to regulate rents and provide additional support based on income.
Rents for private apartments rose 0.3 per cent in June from a month earlier, according to a report by real estate portal SRX. Mark Yip, chief executive officer of property agency Huttons Group, expects rents of private apartments to increase between 10 per cent to 15 per cent this year, moderating from the almost 30 per cent increase in 2022.
