SG Rental Outlook 2023-Q1

URA rental index for all private residential properties increased for a ninth consecutive quarter, leading to an appreciation in the price of smaller condominium units located in Singapore's central area.

With demand for private homes outpacing the supply of homes, the URA rental index for all private residential properties recorded a ninth consecutive quarter of increase. Rents increased at a slightly moderated pace of 7.4%
QoQ in Q4/2022 compared to the 8.6% QoQ in Q3/2022.

The strong leasing demand for homes as more high net-worth foreigners enter Singapore and the lack of available stock and new completions.

Prices of smaller condominium units located in Singapore's central area could appreciate more compared to larger units in the next few years, following new rules to limit such shoebox apartments.

From Jan 18, 2023, developers of all private, non-landed homes within central planning areas will need to set aside at least 20 per cent of dwelling units with a minimum of 70 sq m of the net internal area – similar to the size of a two-bedroom unit.

The new ruling means that in future, there will be fewer shoebox units built-in central districts, which could drive up their prices on the resale market.

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