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eRoad damage repaired Blocked drains cleared and road cleanup underway AdvertisementThe private housing rental market saw a modest rebound in the fourth quarter of 2024, with rents inching up 0.2% quarter-on-quarter (q-o-q) in the last three months of the year, according to a market report by Savills Singapore. However, landlords should not expect much rental growth this year as the market is likely to remain flat.The non-landed private residential market had a relatively poor performance in the first three quarters of 2024, which led to a 1.7% decline in rents for the whole year, marking the first full-year drop since the market recorded a 0.5% year-on-year (y-o-y) decline in 2020. In the last quarter of 2024, there were 19,733 leasing transactions, marking a 24.2% drop from the previous quarter.According to Savills, the decline in leasing activity is likely due to a decrease in net new rental demand as well as a seasonal lull in rental activity at the end of the year. The decrease in the number of employment pass (EP) and S pass holders in 2024 could also have contributed to the lower demand for rentals.Additionally, the bulk of the decline in leasing activity was attributed to a 30.8% decline in rental contracts for landed homes across the island. Leasing volumes for apartments and condominiums also saw a 23.7% decrease over the same period.Despite the decrease in leasing activity, there is still some growth in rental demand, according to George Tan, managing director of Livethere Residential at Savills Singapore. He also notes that rents in the private residential market have stabilized. Additionally, more affordable rents can be found in suburban areas, which allows tenants to prioritize lifestyle options such as larger units, proximity to MRT stations, malls, and recreational activities.According to rental data compiled by Savills, the development with the most condo leasing deals in the fourth quarter of 2024 was Parc Esta, a 1,399-unit development in District 14. The project recorded 163 rental transactions at a median rent of $6.84 psf per month (pm). Other developments with high rental transactions include Marina One Residences (126 transactions at $6.62 psf pm), The Sail @ Marina Bay (126 transactions at $6.72 psf pm), Normanton Park (120 transactions at $6.26 psf pm), and D’Leedon (107 transactions at $5.43 psf pm).In terms of rental price growth, the Outside Central Region (OCR) was the only region in the fourth quarter of 2024 that saw average rents decline, with a 0.8% decrease q-o-q. In contrast, rents in the Core Central Region (CCR) and Rest of Central Region (RCR) saw growth of 0.9% q-o-q and 0.3% q-o-q, respectively. According to Savills, the decline in rent prices in the OCR could be due to an increased number of tenants in suburban locations shifting to more central neighborhoods, driven by relatively more affordable rents.Based on a basket of luxury properties tracked by Savills, the average monthly rent for high-end condos increased by 1.7% q-o-q in the fourth quarter of 2024, reaching $5.85 psf pm. This suggests that the luxury rental market could see a slight rebound after consistently declining over the previous five quarters.Looking ahead, landlords are likely to face headwinds in the rental market as companies continue to reduce headcounts and hire fewer expatriates, says Alan Cheong, executive director of research and consultancy at Savills Singapore. Additionally, landlords face higher property taxes for non-owner-occupied residential properties, as well as increased conservancy charges due to upward inflationary pressures.However, the relatively limited supply of large luxury properties on the rental market may help landlords resist “underpriced” rental offers, according to Cheong. He adds that “Although rents for non-landed private residential properties turned the corner in the third quarter of 2024 and continued rising in the fourth quarter of 2024, we anticipate challenges in the rental market in 2025.”In the future, the widespread adoption of AI could reduce overall manpower requirements for some high-tech firms, and companies may continue to reduce hiring of white-collar professionals. This could lead to a smaller pool of expat tenants in Singapore, says Cheong. “The saving grace for the rental market is that for 2025, there are fewer new completions of private homes expected,” he says. Higher property taxes on investment properties will also discourage landlords from accepting “low ball” rental rates. Additionally, Cheong expects that it may take longer for interest rates to fall, which could result in mortgage payments remaining at current levels for longer.