Private home rentals decline for the first time in 3 years — URA

SINGAPORE: The Urban Redevelopment Authority (URA) released real estate statistics for the final quarter of 2023 on Friday (Jan 26), which showed that private home rental rates fell for the first time in three years.

The URA noted that private residential property rentals declined by 2.1 per cent last quarter. Rentals still increased by 8.7 per cent for the whole of 2023, although at a significantly reduced rate from the year before, when they increased by 29.7 per cent.

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The other key points in URA’s most recent report are as follows:

Private housing prices increased by 2.8 per cent for the fourth quarter of 2023, in large part because of sales transactions at a number of newly-launched projects.

The private residential price increased by 6.8 per cent overall in 2023. In 2022, it increased by 8.6 per cent and in 2021, by 10.6 per cent, showing moderation for the second year in a row.

The sale of private residential properties declined by 17 per cent in the fourth quarter in comparison with the previous one. Notably, the overall transaction volume for last year decreased by 13 per cent from 2022’s numbers, the lowest it has been in seven years, since 2016.

In 2023, there was a total of 21,300 private residential units, including ECs, that were completed. These include 4,100 in the fourth quarter of the year. This was more than twice the number that was completed the year before and the highest yearly total since 2016.

“Global economic activity is expected to ease further into 2024, with domestic mortgage rates at elevated levels. Households should continue to exercise prudence when taking on new financial commitments including long-term mortgage debt servicing obligations,” said the URA.

The decline in rentals may be largely attributed to former tenants moving into their newly completed homes, after delays due to the Covid-19 pandemic, which affected the construction sector.

Dr Tan Tee Khoon, the Country Manager for PropertyGuru Singapore, said that it’s likely that there will be more homes and vacated units, which means that there will be more rental units listed.

He also pointed out that the decrease in private property purchases among foreigners, saying that this is largely because of the most recent Additional Buyer’s Stamp Duty (ABSD) hikes imposed on them.

In the last quarter of 2022, foreigners made up 6.9 per cent of all private property transactions, compared to 1.6 per cent in the same period a year later. /TISG

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