The leasing market performed well last year as rents hit a record high and volumes were higher than in the pre-pandemic period.
Rents continued to rise last quarter amid a shrinking housing stock and rising home prices. According to URA data, rents climbed faster by 7.4 per cent in the fourth quarter of last year to a new high, after rising 8.6 per cent in the third quarter. For the whole of 2022, rents rose by 29.7 per cent, the highest annual increase since 2007 when rents rose 41.2 per cent.
Owing to the year-end holidays, rental demand slipped in Q4, dipping by 19.6 per cent to 20,627 transactions from 25,657 units in Q3 2022. Occupancy rates stayed healthy at 94.5 per cent in Q4 2022. For the whole of 2022, 90,071 homes were leased, less than the 98,605 units in 2021, 93,960 units in 2019 and 92,537 in 2020.
Rents have been rising continuously for over two years as demand outstrips supply. In 2023, there will be a significant ramp-up in housing supply, with 19,291 new private homes, including executive condominiums (EC), slated for completion. The increased housing supply may ease some rental pressures, especially in the suburbs and city fringe areas. There could be some relief in sight for HDB upgraders and Singaporeans who are renting as they wait for the completion of their new homes. There will be more housing options, and possibly an increased number of suburban homes offering affordable rents. We expect rents to rise at a slower pace of around 13 to 16 per cent this year.