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.