Rental demand for private homes rises in Q1 but rents "to remain flat"

Private home leasing demand picked up in the first quarter this year and could grow further as the economy improves, property consultancy Savills said on Monday. -- FILE PHOTO: ST
Private home leasing demand picked up in the first quarter this year and could grow further as the economy improves, property consultancy Savills said on Monday. -- FILE PHOTO: ST

SINGAPORE - Private home leasing demand picked up in the first quarter this year and could grow further as the economy improves, property consultancy Savills said on Monday.

However, it said that rents could remain flat or continue to weaken this year "due to increasing supply and the tighter rental budgets of overseas nationals".

The number of rents signed in January through March climbed 4 per cent to 13,077 transactions islandwide from the previous year.

This was mainly due to a strong surge of demand in the city fringe, which accounted for 37 per cent of the total number of rents - the region's biggest slice of the pie since 2004, Savills said.

The number of leases signed for city fringe homes also jumped 11.2 per cent in the first quarter from the preceding year.

Private homes in the city fringe were likely more popular because they fit expatriate tenants' lower housing budgets better yet were still relatively convenient, it said.

Tenants also have their pick of units at recently completed developments in that region, Savills added. More than 2,500 private homes were completed at major projects in the city fringe last year , such as Ascentia Sky in Alexandra and Waterbank at Dakota in Dakota Crescent.

The city fringe trumped the city centre, which accounted for 32.4 per cent of leases in the first quarter, and the suburbs which made up 30.6 per cent.

The number of leasing deals in the city centre also slid 1.1 per cent and those in the suburbs inched up a marginal 1.5 per cent from the year before.

However, Savills said that overall, "the anticipated robust rise in Singapore's economy should help to support the pace of growth in private residential leasing demand".

Singapore's economy is forecast to expand between 2 and 4 per cent this year from last year.