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Rents of luxury units declining: report

Posted on 28 Oct 2014 | Comments Off

The average monthly gross rents of luxury/super-luxury apartment could decline by about 5 percent for the whole of 2014.

According to a recent research and forecast report by Colliers International, rents for these units have fallen 3.9 percent over the January to September period this year.

Specifically, it fell 0.5 percent quarter-on-quarter to $5.17 per sq ft per month as of Q3 2014, following the 1.4 percent quarter-on-quarter decline in Q2 2014.

“While tenants continued to enjoy stronger negotiating powers in light of the many choices available in the market, well-maintained and attractively-located homes were able to hold rents,” the report said.

The average capital value of luxury and super-luxury apartments softened by a steeper 2.1 percent quarter-on-quarter following Q2 2014’s 1.1 percent fall to $2,584 per sq ft. This is because acute affordability concerns is proving to be a formidable push factor.

For the last quarter of the year, Colliers International predicts leasing activities generally tend to slow down over the October to December year-end festive season. “With a mounting supply of high-end apartments vying for a limited pool of tenants amid an increasingly competitive leasing environment, this may exert further downward pressure on rents in Q4 2014,” the report said.

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Posted in Luxury Property, Rental / Lease

Tagged luxury apartment, Luxury Residential Property, Rental, Singapore Property Rental, super-luxury apartment

S’pore property outlook challenging until 2020

Posted on 30 Sep 2014 | Comments Off

What does the future hold for Singapore’s property market?

According to a recent Savills report, the outlook remains challenging for the rest of 2014, and this is expected to continue over the next six years.

The report looked at how 12 world cities would perform in 2020 and gave a tough assessment of Singapore.

Although the office sector is still robust with rents increasing by 7.3 percent in the first six months of 2014, the residential market has slowed with values and rents dropping by 4.2 percent and 3.5 percent respectively during the period.

This is due to the government’s cooling measures which are continuing to put pressure on the city-state’s prime residential market.

Savills added: “Market controls are set to be a feature of Singapore over the coming years as it battles market affordability in a bid to remain competitive on the global stage.”

One factor that puts Singapore at a disadvantage is its restricted land supply, which is at odds with the increasing wealth and growing workforce.

Lower value industries may have to relocate across the causeway, where land, property and wages are cheaper.

At the same time, Singapore risks becoming more rarefied or distant from the lives and concerns of ordinary people, with Singaporeans protected by government access to housing.

Meanwhile, employers will face more difficulty in attracting and retaining young talent from overseas due to the high real estate costs.

On a positive note, Singapore’s high-tech infrastructure and proximity to some of Asia’s key growth markets will see it progressing as a world leader in business.

In fact, the World Bank has ranked Singapore as number one for ease of doing business.

The city-state also has a strong reputation in the biotech and energy sector.