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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

Prime rents declining

Posted on 21 Jun 2014 | Comments Off

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.”