Demand for HDB rentals muted in August
Condo rental volumes reversed from the previous month’s upward trajectory, dipping 14 per cent in August, while prices continued to increase 0.3 per cent from July.
An estimated 6,994 units were rented in August, compared with 8,136 in July, based on flash estimates released by SRX and 99.co on Sept 19.
Rental volumes were 3.8 per cent higher year on year, but 7.6 per cent lower than the five-year average volumes in August.
By region, 35.2 per cent of the total volume were from the Outside Central Region (OCR), 34.5 per cent were from the Rest of Central Region (RCR), and 30.4 per cent were from the Core Central Region (CCR).
Condo rents were up 0.3 per cent in August, climbing for a second straight month. Prices increased 0.6 per cent in the OCR, 0.4 per cent in the RCR and 0.2 per cent in the CCR.
However, overall rents decreased 3.7 per cent year on year. By region, prices were down 4.5 per cent in the CCR, and 3.4 per cent in both the RCR and OCR.
Ms Christine Sun, chief researcher and strategist at OrangeTee, said that “rents may have bottomed out” but more data in the coming months is needed to confirm if the market is on a solid recovery path.
“There seems to be an increase in expatriates, international students, and foreign workers entering Singapore lately, resulting in more rental inquiries,” she said.
Considering the tight housing supply in the current rental market, Ms Sun said, “the likelihood of rents dropping significantly is low”.
Ms Wong Shanting, head of research and market intelligence at ERA Singapore, added: “While the rental market has started to see some form of recovery, this might be short-lived, as an estimated 7,000 units are slated to complete in the second half of 2024. This will inject fresh rental inventory in the coming months.”
Meanwhile, Housing Board (HDB) rents were down in August, decreasing 0.4 per cent from the previous month.
Prices decreased 0.5 per cent in mature estates and 0.4 per cent in non-mature estates.
Breaking it down, rents were down 0.9 per cent for three-room flats, 0.1 per cent for five-room flats and 0.3 per cent for executive flats. Rents, however, held steady for four-room flats.
Overall rents gained 4.2 per cent on the year, with mature estates up 4.5 per cent and non-mature estates up 3.9 per cent.
HDB volumes also decreased month on month in August, by 12.3 per cent, with an estimated 2,626 flats rented, compared with 2,993 units in July.
Rental volumes were down 13.4 per cent on the year and were 4.3 per cent lower than the five-year average volumes for August.
By room type, 32.5 per cent of the total volume were from three-room flats, 39.3 per cent from four-room flats, 22.7 per cent from five-room flats, and 5.6 per cent from executive flats.
Mr Mark Yip, chief executive of Huttons Asia, observed that pockets of weaknesses are starting to emerge in the HDB rental market.
“Some tenants are progressively moving into their newly completed condos and are not renewing their HDB leases,” he said.
However, he also noted that the cut in interest rates could prompt some HDB owners to upgrade to a new condo and rent an HDB flat in the interim. This may provide some support to the HDB rental market, with rents increasing 2 to 3 per cent in 2024.
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