I've got some bad news for Singaporeans who've invested in local upmarket properties: Singapore's prime residential rental market in the first quarter of 2015 fell 4.9% year on year, making us the 3rd worst performing market in this sector among the 18 markets in a study by global property consultancy Knight Frank.

I suppose the fact that we didn't come in at last place could provide some relief. Moscow and Beijing fared worse, with a year-on-year drop of 5.3% and 7% respectively.

But we are kiasu about everything, so we should totally beat Tokyo to take the number one spot, right? Or at least, we should do better than our regional economic rival Hong Kong, which came at number 6 with a year-on-year increase of 2.2% in prime home rents.

But before you jump to the conclusion that anything in the lower end of the scale means bad business, you need to understand what these figures really mean for Singaporeans.

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Should we be worried about the falling prime home rents? What's the impact on Singaporeans who rent out their properties?

We at GET.com will give you a clear picture of what these figures could mean to you.

  1. 1. What Made It Happen?

    How, on a tiny island where every inch of land is precious, could the rents of prime homes keep falling?

    According to the director and head of research at Knight Frank's Singapore office, the key reasons for the falling prime home rents are the tightened immigration and labour policies, coupled with moderate economic growth.

    Most Singaporeans would not want to rent a home in the city centre. We'd rather stay on the fringe of the city and commute between home and office every day. We still prefer the suburbs despite the fact that our MRT system breaks down once in a while, and prices of cars are among the most expensive in the world.

    Prime home rentals are mostly reserved for deeper-pocketed expats. A common room at a condo in Chinatown costs $1200, according to one of our colleagues from Europe, who works in Singapore now. Not all of us are willing to pay that price just to live near the office.

    When the government tightened immigration regulations a few years ago and even put a curb on foreign skilled labour, the influx of expats with bigger spending power slowed somewhat. That left a lot of prime properties competing for a limited number of tenants.

  2. 2. The Rent For Your Property Could Hold Up

    Based on Knight Frank's definition, prime home rents are the average rents reported in the top 5% of the housing market, which consists of the most desirable and normally the most expensive properties.

    On Knight Frank's website, the prime properties listed are premium apartments, such as Trilive at Tampines Road, Amber Skye at Amber Road, Botanique @ Bartley at Upper Paya Lebar and other high-end properties.

    So if you own an apartment or condo somewhere far from the city centre, the rents you earn from your property will not necessarily fall. As a matter of fact, the prospects for your property-based income might be good for the moment.

    According to the analysis of the leasing market by Savills Research and Consultancy, home rents for certain suburban and city fringe areas could hold up well as high income expats may try to relocate from prime areas due to cuts in company rental budgets.

  3. 3. What's Going To Happen Next?

    It looks like prime home rents will continue to drop, at least until the end of this year.

    Singapore's economy grew by 2.1% year on year in the first quarter of 2015, the same rate of growth recorded in the last quarter of 2014. So basically, we are not doing too bad, but we aren't doing great either.

    About 20,000 new private residential units are expected to be launched this year, while labour regulations showed no signs of easing.

    That may benefit Singaporeans in the job-market, but could add up to duller outlook for property rentals in Singapore. Whether you own a prime or non-prime property in Singapore, you should be prepared for a possible decline in your rents by the end of 2015.