HDB, condo rental volumes are up but price down: 99.co, SRX
Housing and Development Board’s (HDB) and condo rental prices both posted a 0.7 percent decrease in comparison to Dec 2023.
SRX & 99.co flash data released Tuesday (20th Feb) revealed that the Core Central Region accounted for the sole area with rental growth of 0.4 percent, while the Rest of the Central Region slid by 1.6 percent and the Outside Central Region slid by 1%.
The OCR saw a rental increase of 2.4%. Rentals dropped by 0.7% and 0.6% respectively in the CCR.
This is the sixth month in a row that condo rental rates have decreased. Prices are now down 4.3% since their highs of last year.
Private rental volumes have increased 6.2% with an estimated 6,016 rentals in January of 2024, up from 5,665 units the previous month.
The January figure for this year is down 4.6 percent on an annualized basis. It’s also 13 percent lower than it was five years ago.
Comparing the regions, 38.5 percent of the condos were rented in the OCR.
Rents are declining because of rising retrenchment. Some landlords are more willing to accept lower rents than let their units sit vacant for a prolonged period of time.
It has been observed that the demand on the private rental market has increased following the end-of-year holidays. This is because many tenants have either signed new contracts or renewed their old ones at the beginning 2020. The Chinese New Year is likely to affect condo rental numbers in February. Typically, landlords won’t allow their properties to be viewed during this time.
HDB rents also fell, falling 0.7 percent from December levels 2023. The decline was seen in both mature estates and non-mature ones, where the rents decreased by 1.2 percent and 0.3 percent, respectively.
HDB rental prices for four room units were flat on a monthly basis in January, but the rents of executive flats and three-room apartments fell by 1,2%. Five-room rentals dipped 0.6 per cent. Overall rents in January 2023 were up 8.6 percent from the previous year.
All room types have seen record increases in rent, with the exception of five-room apartments which saw a 9.2 percent increase year-onyear. Then came the four-room units, which grew by 8.7%. Executive units grew by 8.2%. And three-roomers grew 7.8%.
Volumes of HDB flats were estimated to have increased by 4.6 % month-onmonth. In December 2023 there were 2,892 flats. This represents an increase of 5.3 % from January 20,23 levels, and a 1.4% rise over the five-year January average.
HDB rental numbers by room type show that 38.4 % of rentals are four-room flats. This is followed by apartments with three or more rooms (33.6%), five-room units (22.8 %) and executive flats (5.2%).
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The proportion of four room flats that are rented out has increased in comparison to December 2023 levels. At this time, this flat type accounted for 36.2 percent of the total volume.
Singapore’s economy was more affected by retrenchments. Some tenants chose to rent a smaller, more affordable flat.
The HDB market rental decline could be temporary because the volume increase indicates a stable demand. HDB continues attracting tenants in search of affordable accommodation. Should condo rents fall further, the gap could be reduced between HDB and condominium rents. Some HDB tenants will then be tempted move into a condo. HDB rents might then begin to consolidate as they move southwards.”
Singapore’s Parenthood Provisional Housing Scheme, or PPHS vouchers, may benefit some smaller HDB resale properties and increase their rental demands. It’s unlikely that HDB rents would increase. Even if HDB prices rise, the increase would affect smaller HDB homes as couples leasing HDB properties are usually more cost-conscious. The impact of vouchers on rental and price demand is still dependent on how many people can qualify and on the amount.
