Commentary on Property news in Singapore
If you thought that what is happening in Singapore with high rentals is unique to just Singapore, think again. According to Savills World Cities Rents and Yields report. (Published on 9-Aug-2022) Singapore has tied with New York to claim the first spot on the global index, where rents outpaced capital value growth. This trend is observed in many of the world’s major cities, with only Hong Kong and Shenzhen (both in China) having contractured in the same period.
Singapore ties with New York in the first position, at an 8.5% growth, while London follows just behind at 7.7% in the Savills Prime Residential World Cities Rental Index for the first half of 2022.
Despite rising interest rates and increased global uncertainty, prime residential rental growth outpaced capital value growth by an average of 3.1% across the Savills World Cities Index, set against a 2.4% increase in capital values.
Fuelled by a combination of factors: the return of international travel, continued purchasers ‘trying before they buy’, and greater prioritization of the home thanks to flexible work patterns, rental price growth in most of the world’s major residential cities properties continued to prove resilient.
Paul Tostevin, Head of Savills World Research, says, “A lack of inventory will continue to fuel growth in the near term, especially for the type of residences prime tenants are demanding: centrally located, quality units with larger floor plates. For these properties, the Covid lockdown rental deal is definitely a thing of the past.”
Alan Cheong, Head of Savills Research & Consultancy Singapore, adds, “Singapore is no different. The inventory shortage arises from landlords repossessing their large luxury homes to enjoy privacy as they continue to Work-From-Home. Rents for non-landed luxury residential units may end 2022 with a 20% year-on-year increase.”
Source: Savills Research