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Luxury property rentals to decline?
Aug 13, 2012
PropertyGuru.com.sg : By Romesh Navaratnarajah: Rents of newly completed high-end homes could decline further upon the completion of over 4,000 units in 2H2012. Based on CBRE data, at least 20 developments with 4,285 units are set for completion in the second half of 2012. Of this figure, around half are located in the central business district (CBD) and in prime districts 9, 10 and 11. These include projects such as Marina Bay Suites, Boulevard Vue, Volari and Skyline 360. According to the Urban Redevelopment Authority (URA), non-landed home rentals in the city centre slipped by 0.1 percent in Q2. Moreover, rents of high-end non-landed homes analysed by Savills saw a four-month consecutive drop. Average monthly rents fell to S$5.03 psf per month, down three percent quarter-on-quarter or eight percent year-on-year. Several experts noted that while the upcoming completion of units could put pressure on the rental market, newly completed projects will still find tenants as long as Singapore remains a cost-competitive option for companies. However, landlords should be prepared to accept lower rents. Tan Kok Keong, Head of Research and Consultancy at OrangeTee, added that vacancy rates for homes within the city centre have been moving up, from 7.8 percent in Q1 to 8.2 percent in Q2.