The average rental of prime residential units in Q2 2014 declined at a similar pace as the previous quarter, easing by 2.4 percent quarter-on-quarter to $4.09 psf per month, according to JLL’s statistics for the second quarter of 2014.
The luxury sector saw rents falling at a faster pace of -2.8 percent quarter on quarter while the typical prime market recorded a decline of -2 per cent quarter-on-quarter.
Dr Chua Yang Liang, Head of Research, South East Asia says, “Companies continue to trim expatriate packages, with the leasing demand from the financial sector most noticeably affected.”
In 2013, average prime rental values were mostly stable before easing in the last quarter, but they have dropped -4.7 per cent in the first half of 2014 and Dr Chua expects a gradual decline for the rest of the year.
The report says TDSR framework has softened market sentiments and activity within the residential sector. After six quarters of declines of less than a percent each, average capital values in the prime residential market fell 1.2 percent quarter-on-quarter to $1,801 psf in Q2 2014.
JLL holds its outlook that market activity will stay lacklustre in the near term as rents and capital values are likely to register a fall of 4 to 8 percent for 2014. Dr Chua said, “Withdrawal of the myriad of market policies is unlikely until 2015 or when the market shows a marked correction of eight to ten per cent, whichever is sooner.”