AS HOME prices start to rise slowly but steadily, rentals of residential properties are also beginning to show signs of creeping up.
The rental market, which has been in a slump in recent years, registered its largest increase in at least eight years for the April-to-June period this year.
According to the latest figures from the Urban Redevelopment Authority, rents rose by 2.1 per cent for the second quarter over the preceding three months, compared with a quarter-on-quarter increase of just 1 per cent in the first three months this year.
As with home prices, luxury residences are leading the way in stirring the rental market.
Although average rentals across all districts and residential property types are still around 25 per cent below their peak levels in the late 1990s, rents for high-end non-landed homes - that is, apartments and condominiums - have surpassed the most recent high in 2000.
New figures from property consultancy Savills Singapore show that monthly rentals for such properties have hit $3.53 per sq ft (psf), up from $3.41 psf in May and overtaking the 2000 peak of $3.50 psf.
The number of residential leasing transactions is also on the rise, said Savills' senior manager of research and consultancy, Mr Wallace Chu.
He noted that there were 8,807 transactions for the first quarter of this year, 15.8 per cent more than in the same period last year.
Preliminary numbers for the second quarter already indicate almost 6,000 transactions for the April to June period, and this figure looks set to surpass that of the first three months when the final numbers come in, Mr Chu added.
Due to an increasing number of senior-level expatriates coming to work in Singapore, rental demand is strongest in the prime areas of Districts 9, 10 and 11, he said.
'Large properties and landed homes are still the most popular, and I think the rental market should keep increasing,' he added.
In District 9, which covers Orchard Road, Cairnhill and Leonie Hill, monthly rents have reached highs of almost $6 psf, according to figures from Colliers International.
The most sought-after developments include The Light @ Cairnhill, Ardmore Park and Leonie Hill Residences, with The Light @ Cairnhill fetching rents of $5.77 psf per month, said Colliers' director of research and consultancy, Ms Tay Huey Ying.
But certain 'non-traditional areas' such as Woodlands, Toa Payoh and Bishan are starting to increase in popularity due to nearby international schools such as the Singapore American School in Woodlands and the Australian International School at Lorong Chuan, added Mr Chu.
'Although prices are not skyrocketing, we are seeing the number of leasing transactions go up in these areas,' he said.
For the rest of the year, he expects average apartment rents to rise by another 3 per cent to 5 per cent, while rents for high-end prime properties could go up by as much as 10 per cent.
fiochan@sph.com.sg
