Analysts say limited supply, rising demand from foreigners mean landlords call shots.

Private residential property rents hit a record high in 2022, topping the previous 2013 peak. An index tracking rents in the sector was 23.9 per cent higher in the July-to-September quarter of 2022 compared with the same period in 2021 and 16.7 per cent ahead of the 2013 benchmark, said the Urban Redevelopment Authority.

Private residential property rents hit a record high in 2022, surpassing the previous peak in 2013.

An index tracking rents in the sector was 23.9 per cent higher in the July-to-September quarter of 2022 compared with the same period in 2021 and 16.7 per cent ahead of that 2013 benchmark, noted the Urban Redevelopment Authority.

Surging rents caught many tenants by surprise, with many having to move after their leases were up and landlords hiked prices, said property agents.

“Landlords have raised rent by at least 30 per cent. Many of them just want to test the market,” said Mr Alex Low, an associate district director at PropNex Realty.

Mr Low has seen the red-hot market first-hand: He represented the owner of a four-bedroom condominium unit at The Oceanfront in Sentosa Cove who raised the rent by almost double to $25,000 a month in November. The 3,500 sq ft unit, which was previously rented for $13,000 a month, was swiftly leased out after just one viewing.

Mr Low said: “In a hot property market with limited supply, I have come across many tenants who made an offer after just one viewing.

“Many foreigners who have yet to move to Singapore are also ready to make an offer over a video call. Nowadays, we would get a few offers for one unit.”

Analysts noted that the tide has turned for property investors since the Covid-19 pandemic, with landlords now calling the shots.

One property investor who declined to be named said: “In the past decade, rents were falling and it was the tenants’ market. The current rise in rental merely takes us back to the peak of 2013.”

The investor, who owns a dozen properties, said he recently raised the rent for a two-bedroom condo unit in Tanjong Rhu by 30 per cent – from $4,600 to $6,000. The unit was rented for $5,800 a month in 2013.

He noted that tenants ruled the roost from 2014 to 2020, adding: “These things go in cycles and I expect (the high rents) to continue for the next two to three years.”

A tenant who moved out of an apartment after the landlord wanted to raise the monthly rent from $3,900 to $5,500 said: “I took it as a chance to find something cheaper. But my neighbour, who is an expat, decided to leave Singapore after his landlord wanted to raise his rent by $2,000.”

ERA Realty research and consultancy head Nicholas Mak attributed the spike in rents partly to a rise in leasing demand from more foreigners coming to Singapore after the Government eased travel and Covid-19 restrictions.

“The supply chain disruptions in the construction industry had delayed the completion of both private and public housing projects, leading to a lower supply of completed housing units,” he added.

“The combination of higher demand and slower supply led to strong upwards pressure on rental rates.”

Mr Mak noted that the rise in domestic demand was mainly driven by the shift in work arrangements during the pandemic, which saw more people working from home. There were also newly married couples who wanted to live together while waiting for their matrimonial homes to be completed.

He expects demand to soften in 2023, but not significantly.

“The number of private homes expected to be completed and available for occupation will increase from about 9,000 units in 2022 to 18,000 units in 2023. Some of these private homes will be offered for rent,” said Mr Mak.

“The overall housing rental will continue to rise in 2023, but at a slower pace than in 2022. Whether it will plateau and stabilise would depend on whether the job market will soften and lead to a drop in leasing demand.”

He added: “Rentals had already reached a historical high nine months into 2022 and are unlikely to decline in the next six months as the market dynamics that are driving the increase are unlikely to change.”

Credit: The Straits Times