SINGAPORE - A breakneck surge in private residential rents hammered Singapore’s tenants with increases of about 21 per cent in the first nine months of 2022, and the pain looks set to continue this year.

Despite the pace slowing, Bloomberg Intelligence analysts predict that rents are set to rise by another 10 per cent to 15 per cent in 2023, driven by the country’s continued economic recovery, as well as resilient employment and household income.

An acute supply crunch and an influx of wealth into the financial hub have meant that the country’s property market has largely dodged a global slowdown driven by sharp hikes in interest rates. Data released on Monday showed that new private home sales fell for a third straight month in December to the lowest in almost 14 years as a lack of units kept buyers at bay.

Still, the market may show early signs of moderation with 18,234 private residential units expected to be built this year, according to Bloomberg Intelligence real estate analyst Ken Foong, using calculations based on data released by the Urban Redevelopment Authority in the third quarter. This is slightly more than double the number of units built last year.

The biggest risk to such an estimate is a possible slowdown in the economy or increased unemployment, said Mr Foong.

“But so far, with the consensus forecast of more than 2 per cent gross domestic product growth and resilient employment and household income, this could support the rental growth in Singapore,” he said.

The latest estimates echo an earlier analysis from Singapore-based real estate agency OrangeTee & Tie, which expects private rents to rise between 13 per cent and 16 per cent this year. BLOOMBERG