Singapore residential leasing volume down 5.1% to 22,699 transactions in Q1

One-bedroom units in the Core Central Region are enjoying high take-up.

Owing to the Chinese New Year period and the surge in Covid-19 cases, 

Private residential leasing volumes in Singapore declined for a second consecutive quarter in Q1, dipping 5.1% to 22,699 transactions. This could be due to the Chinese New Year festivities and the persistent COVID-19 cases. 

However, Savills says the contraction was more moderate than the 11.9% recorded in Q4/2021. 

Here’s more from Savills:

Rental transactions also fell 3.9% on a YoY basis. While the number of rental contracts contracted for both landed and non-landed homes, the magnitude of decline was larger for non-landed homes, with a decrease of 5.3% on a QoQ basis to 21,395 transactions. 

The leasing volume of landed homes decreased marginally by 0.6% QoQ to 1,304 transactions in Q1/2022. For non-landed homes, the largest decline in rental transactions was in CCR, with a 6.3% QoQ fall to 6,659 transactions. The leasing volume of non-landed homes in Outside Central Region (OCR) and Rest of Central Region (RCR) fell by a smaller 5.9% and 3.7% to 7,704 and 7,032 transactions respectively. 

As travel restrictions ease, rental demand is expected to be boosted by expatriates who were slated to enter Singapore in the past two years but had their move delayed by pandemic measures. In addition, demand is also projected to be supported by those who are renting homes in the interim while waiting for their new homes to be completed. They are doing this to avoid paying the Additional Buyer’s Stamp Duty (ABSD) for a second home. 

Construction delays caused by the pandemic are also slowing the velocity of rental transactions because they mean that tenants will be unable to free the unit (for a new lease) in accordance with earlier plans. Also, the December 2021 tightening of the cooling measures may have prompted some to consider renting first while taking a wait-and-see approach to choosing their next home. 

As in Q4/2021, all but one of the top five non-landed projects with the highest number of leasing transactions in Q1/2022 were in CCR. Among these four developments, the bulk of the rental volume for three of the projects was for one-bedroom units. These three projects are Duo Residences, Marina One Residences and The Sail @ Marina Bay. 

In particular, the proportion of one-bedroom units leased in the quarter at Marina One Residences and The Sail @ Marina Bay exceeded half of the quarter’s leasing transactions in these projects. This may be due to these projects being situated in the Central Business District (CBD) and the lack of family-oriented attractions in the vicinity such as schools will mean that families are unlikely to favour these locations. 

Expatriates, who are working in Singapore alone, are therefore likely to favour these developments as they are within walking distance of Grade A offices in the CBD. Another project in the top five non-landed developments in the CCR is D’Leedon. In Q1/2022, it saw a larger proportion of rental transactions of slightly larger units (two- and three-bedroom units). This may be due to more amenities as well as schools in the vicinity which appeal to families.