A rise in median rental prices for non-landed homes was picked up in a recent report by Savills Singapore. To further clarify, this was not total rent, but on per-square-foot terms. In other words, they were considering rentals divided by the built-in area of the unit, instead of just taking the full rental of each unit as a whole.

The median rental for non-landed homes rose to $3.60 psf per month for July, an increase of 7 percent. In contrast, landed home median rentals rose 2 percent, to $2.81 psf per month. Total number of leases in July also grew in volume, to 4717 transactions, which is 11 percent more than June.

All these point to the great popularity of shoebox apartments in the rental arena. Such units tend to have higher per-square-foot rental prices, but lower total rent per unit. Coupled with the sheer increase in volume overall, this naturally drives up the per-square-foot rates, as can be seen by the non-landed home rental figures.

This news is bound to entice more investors into the shoebox market, especially those wishing to reap capital gains and passive income. Of course, this will lead to even higher prices and consequently higher rentals. To what extent such activity will affect the shoebox prices, rental, and even the greater property market as a whole, remains to be seen. But the ripples will definitely be felt.

And here is the danger. We have stated before that the shoebox market in particular, is heading towards dangerous waters. The sheer number of units that will start becoming available in one to two years’ time is bound to create turbulence in formerly calm seas. This can only be made worse by people misreading this bit of rental news as an optimistic outlook.

We can only hope that your ship is able to ride out the coming waves, however high they may be.

 

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  One Response to “Rental Rise May Worsen Glut Down the Road”

  1.  

    You don’t need to rent a car in Singapore as the public tanrsport system (busses, trains, cabs) are plentiful and are well connected within the country. If you rented a car, you would have to pay extra charges like the ERP on top of petrol which is pretty expensive here it just isn’t worth it for a few days’ trip.Also, the amount of money you bring with you would depend on what you do here. If you plan on clubbing and shopping you’ll have to bring more, versus if you were just here to sight-see and try the local food.Singapore doesn’t have to be an expensive place to have fun in but of course, if you have expensive taste, it can be.I would say an approximate amount of S$800-S$1100 should be enough. And that’s a conservative estimate.Hope that helped!

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