PropertyGuru’s report found that asking rents from private residential property landlords in Singapore are declining since the fourth quarter of 2023. This is because rental demand has decreased and supply increased.

The study, which was published late in March, revealed that asking rents, as indicated by the rents listed on PropertyGuru’s portal, , steadily decreased in 2023’s last three months. The corrections to asking rents between October and December led to a decline in transacted rentals as well.

It follows two years marked growth in asking and transacted price. According to the Urban Redevelopment Authority’s rental index, rents of non-landed private houses grew by 38.8 percent between Q4 2016 and Q4 2017.

PropertyGuru’s portal saw a median asking rental increase of 27,3% between January and December 2023. The median transacted rate, meanwhile rose 35.3%.

The drop in rents is due to an ease in rental demand as well as a rise in supply during the past year or two.

Rental demand, as measured by PropertyGuru’s engagement data (a proxy for home-demand, which is a measure of visits to the portal, the time spent on a listing, and the outreach to agents ), fell by almost 70 percent from a July 2022 peak in December 2023. Since January 2023 the number of properties listed on the portal is on the rise, with a 62.9 percent increase in the entire year.

The landlords that expected their tenants to pay higher rental prices in the second half 2023 may have experienced longer leasing times or even leased at a reduced price.

Rents are expected to begin declining in 2023.

The shrinking gap indicates that the rental market is changing, as more landlords have stopped increasing rents. The trend is likely due to rental properties staying on the market longer, causing landlords’ expectations to be adjusted to match market conditions and tenant affordability.

Singapore’s downward trend hasn’t affected all areas.

Find out more about Terra Hill pricing

Renter interest in and demand for rental listings District 9 (Orchard & River Valley) was high, as were the visitation and market friction rates.

This indicates that the rental market is currently undersupplied in the area. It could be a sign of a landlords’ market, with increased competition among tenants.

In March, potential tenants also requested a median monthly rent of S$6,000 in District 9. Rent at the 25th per centile was S$4,000 a month.

99.co data showed that, in January 2018, the average monthly rent of a two-bedder unit at The Sail @ Marina Bay (a project popular with tenants in the Core Central Region) was S$6,656. This was a 2.4% increase from the S$6,499 of January 2023.

Stirling Residences in the Rest of Central Region was S$4,620 (down 7.2%) in January 2024. This is a drop of 7.2 % from S$4,979 in the previous year. Parc Riviera is located in the Outside Central Region. The average monthly rent of a two-bedder at Parc was S$3,740. This is down 8.2 % from January 20,23 when it was S$4,072.

The rental market has reached a critical point. Due to the current market uncertainty, it is difficult for us to determine the extent of a correction.

According to SRX’s and 99.co’s flash estimates, released on Thursday, condominium rentals increased by 0.3 percentage points in March following seven months of decline.

Even though rents have increased significantly in the past two-year period, it is unlikely that rents will drop as much.

Rents can also be corrected based on the attributes and location of a project.

Rents could be reduced by older units, or units with less desirable traits or locations. Rents can remain stable in some cases, for example, if you are looking at newer projects in desirable areas, like the freehold condo Klimt Cairnhill located in District 9.

Rents have been declining for units with three beds and smaller. This could indicate an increase in inquiries or landlord resistance to lower rents. In the meantime, due to limited availability, large bedroom types have held their ground.