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

There are many challenges for landlords trying to lease out their apartments. A rise in retrenchment has led to less demand for tenants. Some landlords will compromise on their rents in order to avoid having their units vacant for long periods of time.

Private rental volumes have increased by 6.2% with an estimated 6,016 apartments rented in Jan 2024, up from 5,665 the month before.

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

Housing and Development Board (HDB), and condominium rentals, each posted a decrease of 0.7 per cent from December 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 (RCR), and the Outside Central Region (OCR), saw rents decline.

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.

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.

Breaking it down, the OCR is responsible for the majority of condo rental income, or 38.5%, followed by the RCR at 32.6% and the CCR at 28.8%.

Many tenants renewed their leases and signed new ones after the year-end holiday. Experts noted that condo rental volumes in February were down due to Chinese New Year holidays. Landlords typically do not allow viewings during this period.

HDB rentals also decreased, by 0.7 percent, from the December 2023 level. Both mature and nonmature estates saw rents declines of 1.2 per percent and 0.3 percentage points 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% and executive apartment rents decreased by 3.0%. Five-room rentals dipped 0.6 per cent. Year-on-year, the overall rents are 8.6 percent higher than January 2023. The mature estates have a 7.5percent growth while the non-mature properties see a 9.7percent increase.

All room types experienced record rent increases. Four-room units followed (8.7%), executive units (8.2%) and three-roomers (8.8%).

Renting out four-room flats has increased compared to December 2023 levels, when the flat type accounted for 36.2%.

Singapore’s economy was experiencing more contractions, so tenants might have chosen instead to be prudent and rent a more affordable smaller apartment.

Rents have dropped significantly in comparison to the six-month period prior. This may be the reason why tenants are more likely to rent HDB or condominium units.

He pointed out that they may also take advantage of this opportunity to bargain for a lower rate on the market for condominium rentals.

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He believes that the HDB market’s rental decrease may only be temporary since higher volumes suggest a stronger demand. HDB rentals continue attracting tenants in search of affordable accommodation. The gap between HDB flats and condos may be closed if the rents of condos continue to fall. Some HDB flat tenants could be tempted to switch to condos. HDB flat rents can then begin to consolidate.

She does not believe that overall HDB rents will increase due to the Singapore government’s Parenthood Provisional Housing Scheme voucher. She also said that even if rent prices increased, they would affect smaller HDB flats since most couples would not normally lease larger HDB flats out of concern for costs. The amount of vouchers given and how many people apply will determine the extent to which rental demand and prices are affected.

Volumes on the HDB Market grew by 4.6 % month-on month, to an estimated 3,024 rented flats as compared to the 2,892 rented flats in December 2023. This is a 5.3% rise from January levels in 2023 and 1.4% increase from the average volume of the past five years for the month January.

HDB’s rental market is dominated by the four-room apartment, accounting for 38.4%, followed closely by the three-roomer (33.6%) and five-roomer (22.8%). Executive units (5.2%) are also popular.

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