HDB and Condo rents fall, but rental volume rises: SRX 99.co

Housing and Development Boards (HDBs) and condominium rental costs each showed a 0.7% decrease from the levels of Dec 2023.

SRX & 99.co, in a release on Tuesday (20th February), showed that the Core Central Region grew by 0.4 % while the rest of the Central Region fell by 1.6 % and the Outside Central Region (OCR), by 1 %.

Rental growth in the OCR was 2.4% higher than that of the CCR. Rentals declined by 0.7% in the CCR on an annual basis and by 0.6% in the RCR.

A rise in the number of layoffs has also led to a softer demand from tenants. Some landlords will compromise on their rents in order to avoid having their units vacant for long periods of time.

Since the increase in condo supply last year, the prices of rental condominiums have been falling for six months. They are down 4.3 percent from their highest levels.

Private rental volume increased by 6.2 per cent, with approximately 6,016 apartments rented in Jan 2024 as opposed to 5,665 the month before.

The latest number, however is lower by 4.6 percent on an annual basis, and 13 percent lower than January’s five-year average.

Among the three regions, the OCR was the largest, accounting for 38.5%, followed by the RCR at 32.6% and the CCR at 28.8%.

We have observed an increase in demand for private rental properties after the holiday season, due to the fact that many tenants signed new leases (or renewed their current ones) at the beginning 2024. A dip in condo rents is predicted for February, due to Chinese New Year, because most landlords don’t open their homes for viewing.

HDB rentals also decreased, by 0.7 percent, from the December 2023 level. Both mature and nonmature estates saw rents declines of 1.2 percent and 0.3percent respectively.

HDB rents in January were stable for four-room HDB units, compared to the previous month. However, three-room HDB rentals declined by 1.2% while executive flats rents decreased by 3%. Five-room rentals dipped 0.6 per cent. Overall, the rents are up 8.6 percent from January levels of 2023.

All room types experienced record rent increases. Four-room units followed (8.7%), Executive units (8.2%), and Three-roomers (7.8%).

Volumes on the HDB Market grew by 4.6 per month, to an estimated 3,024 rented flats as compared to the 2,892 rented flats in December 2023. That represents a 5.3 percent increase from January levels in 2023 and 1.4 percent more than the average volume of the last five years for the month January.

HDB’s rental market is divided into four-room apartments, which account for 38.4 percent of all rentals, followed by the three-roomers (33.6%), five-room apartments (22.8%), executive units (5.2%), and then the three-roomers.

The percentage of four-room flats rented has increased compared to Dec 2023 levels where this flat type contributed 36.2 per cent to volumes.

Read more on this freehold development at Thiam Siew Avenue : The Continuum

Singapore economy saw more retrenchments. Renters may have opted to be prudent and rent smaller apartments that are more affordable.

It is possible that the decline in HDB rental prices may only be a temporary phenomenon, since the increased volumes are a sign of a firmer demand. HDB rentals are still a popular choice for tenants searching for affordable housing. The gap between HDB flats and condos may be closed if the rents of condos continue to fall. Some HDB tenants could be tempted to switch to condos. HDB flat rents can then consolidate or move to the south.

Singapore government’s Parenthood Provisional Housing Scheme Voucher (PPHS) could benefit some smaller HDB resale homes and increase rental demand. Overall HDB rent prices are unlikely to increase. Even if HDB rent prices increased, it is likely to affect smaller HDB units as couples using this scheme tend to not lease larger HDB units due to cost considerations. Nevertheless, the extent to which the vouchers will impact rental demand and prices depends on how many people apply for them and how much they are given.



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