According to JLL, residential rental prices in Bangkok, Thailand, rose 18.1% year-on-year.
Alexander Spatali | Moment | Getty Images
“While we maintain a bullish long-term outlook for more established markets such as Hong Kong, we see rental growth being more pronounced in the region’s more developed markets, primarily Ho Chi Minh City, Jakarta, Bangkok and Manila,” Roddy Allan, chief research officer for JLL Asia Pacific, told CNBC Make It.
According to the JLL report, rents in Asia Pacific remained broadly stable in the first quarter of 2024, but some cities saw sharp increases, “supported by robust rental demand for high-quality assets and an increase in the return of expatriates to the office.”
Four cities have led the recovery in rental growth in Asia so far this year:
Residential rent growth in Q1 2024 (YoY): +18.1%
Average rental price: 8,292 baht (about $226) per square metre per year
“Rental demand is booming in Bangkok,” Alan said. “Much of the rent growth is coming from the luxury condominium sector, but more broadly, the current interest rate environment and the return of tourists and expats to Bangkok is spiking apartment rental demand,” he told CNBC.
The report said “inflated” sales prices, household debt and high interest rates are stimulating rental demand.
A total of 2,800 units from 12 projects will be delivered by the end of 2024. New additions to the Bangkok market are expected to further fuel rental growth, according to the report.
Residential rent growth in Q1 2024 (YoY): +5.9%
Average rental price: $120/sqm per year
“Ho Chi Minh City, Vietnam’s largest city, is the [best] “We evaluate the performance of the market from a housing perspective,” Alan said.. Rents in the city increased 5.9% in the first quarter of 2024 compared to the same period last year.
According to the report, the rise in rents is due to higher rents for quality new build properties in the city.
“New supply is also coming on stream at the lower end of the market and continued price pressures will drive demand,” Allan said.
Residential rent growth in Q1 2024 (YoY): +4.8%
Average rental price: IDR 3,214,555 (approximately $200) per square meter per year
According to the report, apartment sales in Jakarta have been significantly sluggish over the past three years, with the presidential elections in 2024 being one of the factors limiting sales.
Alan told CNBC Make It that despite the slowdown in sales, rental demand in the city “remains strong, especially in the luxury market.”
“We expect new property launches in Jakarta to remain slow throughout 2024, which will drive demand for quality space across the city,” he said.
Residential rent growth in Q1 2024 (YoY): +0.8%
Average rental price: PHP 9,984 (approximately $172) per square meter per year
According to the report, Manila’s residential rental market grew in the first quarter, driven by a steadily increasing demand from executives and expatriates as the return to the office recovers.
Rental demand is expected to remain stable as return-to-office policies improve further into 2024, the report said.
While rents are trending upwards in these lesser known markets, rents are falling in Asia’s more mature markets. Singapore’s residential rental market has fallen sharply, down 15.7% year-on-year. Shanghai’s has fallen 3% year-on-year.
“Rents in mainland China are somewhat depressed due to the large number of luxury apartments available for rent,” Allan told CNBC Make It. “Singapore is in a similar situation with an abundance of new listings.”
“In the longer term, we expect rents in mainland China and Singapore to recover due to reduced supply, a rebound in expatriate population and growing demand for luxury residential rentals.”
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