Leasing Activity Rebounds as Singapore Rents Find a Floor
Introduction
Singapore’s residential rental market is showing signs of stabilization in 2025, as a rebound in leasing activity follows a period of correction. This turnaround offers both hope and grounded insights for tenants, landlords, and investors amid shifting economic conditions.
1. Signs of Stabilization & Leasing Recovery
Recent data reflects that while private residential rents had previously declined—marked by a 0.7% dip in Q2 2024 after a larger 1.8% drop earlier in the year—this trend appears to be leveling off. Leasing activity has begun to pick up, suggesting a potential bottoming of the rental downturn.
2. HDB Rents Rise and Impact Market Dynamics
Interestingly, while private rents softened by 1.9% in 2024—the first full-year contraction since 2020—rents for HDB flats rose by approximately 3.6%, narrowing the rental gap and increasing competition between public and private segments.
3. Demand Resilience in Core and Suburban Segments
Rental caveats in the prime Core Central Region (CCR) and suburban OCR both increased in 2024—by 5.7% and 5.5%, respectively—indicating growing demand across these segments despite market volatility. Smaller unit demand in OCR remains particularly strong due to narrowing price differentials with HDBs.
4. External Factors and Market Sentiment
Global uncertainty—such as tariff escalations—has introduced fresh economic caution. However, Singapore’s status as a safe haven may attract ultra-high-net-worth individuals, potentially bolstering demand for luxury rentals.
5. Landlord & Tenant Outlook
Landlords are adapting—realigning pricing strategies in light of easing rent growth and heightened tenant expectations. Tenant interest in more affordable locations (e.g., OCR, RCR) continues to influence market dynamics, while increasing HDB rents push some renters to explore private options.
6. What to Watch Next
- Will private rents flatten further or gently rise in response to improving demand?
- Is the narrowing rent gap between HDB and private condos prompting more shifts?
- Can global economic conditions remain stable enough to support further leasing growth?
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