Rent A List Of Rental Rates From 2021 To See How Much To Charge In 2022 (By District)

With rental rates at a six-year high, both landlords and tenants are eyeing their existing leases. For landlords, it may be time to crank up the rental rates; for tenants, now may be a time to extend the lease, if you’re lucky to land a cheap unit. Here’s a breakdown of average rental rates by district, that has been recorded over 2021: 

Rising home prices and Covid-19 help to maintain higher rental rates

2021 was a record year, with average rental rates at the highest since around 2015. This is set to continue for the near term. Blame it on a combination of high home prices, plus an urgent need for housing due to Work From Home (WFH) arrangements. On top of that, construction and renovation delays are causing even locals – not just foreigners – to seek rental arrangements. There’s also the small matter of the recent cooling measures, which may just have convinced some foreigners to rent instead of buy.

Rental Rates In 2021 based on district and unit size

Some notable factors to consider in 2022

• The opening and maintenance of VTLs determine momentum
• But with Malaysia, the VTL (land) may actually bleed off rental demand 
• Resale market prices remain a key factor 
• Increased ABSD may sustain higher rental rates 
• Expect landlords to be less generous, even for longer leases

1. The opening and maintenance of VTLs determine momentum

Vaccinated Travel Lanes (VTLs) allow for quarantine-free travel, between Singapore and selected countries. You can check the current VTLs (Air) and VTLs (Land) on the ICA website.

The continued maintenance of the VTLs, as well as the opening of new ones, is crucial to the flow of new tenants. There’s no way to tell if the Omicron variant, or outbreaks in the relevant countries, might alter the situation. As such, landlords that still have vacancies may still want to act fast, just in case the pandemic worsens and the influx of fresh tenants comes to a stop. 

2. But with Malaysia, the VTL (land) may actually bleed off rental demand

While most agreed that VTLs will increase the tenant pool, some realtors pointed out that it isn’t true for our closest neighbour, Malaysia. 

One realtor explained that:

“For Malaysians to rent in Singapore is not cheap right now; but previously many had no choice, because there was difficulty coming across the causeway if they worked here. 

But now that the link has opened up, they’re free to travel and back and forth again, so many plan to go back to their old arrangement of staying in Malaysia, rather than continue to rent.”

But the realtor added that a VTL to Malaysia is still a net gain for the Singapore property market, if not for our landlords. 

This is because a lot of the expert labour for construction and renovation ultimately comes from Malaysia, so the lack of access would have raised construction and renovation costs. 

3. Resale market prices remain a key factor

Locals who opt to rent are not typically interested in new launches, which are four to five years away from TOP. Rather the intent is to move out fast, so they often look in the resale market. 

The problem is that, for 2021 and 2022, both resale and new launch prices are at all-time highs. Last year, for instance, resale condo prices surged more than 10 per cent, and even then transactions still rose by around 82 per cent. 

Even in the resale HDB flat market, prices spiked by around 12.5 per cent, with Cash Over Valuation (COV) present in around a third of all transactions. 

Faced with rising prices in every segment, Singaporeans who need their own homes are forced to rent. As long as demand remains strong, this priced-out segment will have to turn to landlords for accommodation. 

4. Increased ABSD may sustain higher rental rates

With regard to foreigners, the impact of higher ABSD (30 per cent) is quite straightforward. The higher stamp duty may dissuade more from buying, and some may switch to a “wait and see” approach, in the hopes that sellers will drop prices. 

However, we shouldn’t forget that higher ABSD can drive HDB upgraders to rent as well.

Upgraders who purchase a condo before selling their flat are still required to pay ABSD, within 14 days of the transaction. They may be able to claim ABSD remission later – but an extra 17 per cent of the new home price (for Singapore citizens) may be too steep to swallow. 

This will drive more upgraders to sell their flats before buying a new property; a move that often results in needing temporary accommodation. 

(There may be ways to avoid this though, so do get in touch with us if you need help). 

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5. Expect landlords to be less generous, even for longer leases

Remember how, when rental rates were lacklustre, you could bargain for lower rates in exchange for longer leases? This may not be true in the current market. 

Landlords are generally confident that demand is high, and that they won’t face vacancies. One realtor noted that: 

“Some of the landlords who gave longer leases earlier regret it, because they can see the rental is going up like crazy, but they’re still stuck with the same rental income. 

Now I hear comments like ‘next time when the market is so good, no point to have all these long leases, I get stuck making less’.”

Still, landlords should be careful about settling for shorter leases. It’s tempting to speculate about getting a higher rate six months to a year from now – but the pandemic can quickly change the situation. A reliable tenant with a long-term lease is still a safe bet. 

For more on the rental market situation, follow us on Stacked; we’ll update you as changes happen. In the meantime, you can check out our in-depth reviews of new and resale condos alike, when picking your next rental unit (or your next rental asset).