HDB rents reach new highs: SRX and 99.co

SINGAPORE’s private rental market was soft in February 2024. However, Housing and Development Board housing rents increased to a new record high after falling the previous month. According to the latest estimates from SRX and 99.co, released on Tuesday (Mar. 19), the rental price of condominiums fell by 1 percent in January, marking a net negative increase for a 13th consecutive month.

99.co’s chief data and analytics officer noted that condo rentals had reached their lowest point since 2023 and attributed the downward spiral to an oversupply that has existed since last year.

Last year, many condominiums received temporary occupancy permits. This led to more homes being rented. Rent prices may have been lowered in some locations due to increased competition.

Some tenants will switch to renting private homes from HDB flats in the next few months as private rents continue their adjustment.

Rents in the Core Central Region (CCR), which includes the entire region of the Central Region, fell by 1.6% in February 2024. Rents in the Rest of the Central Region, including the Outside Central Region, fell by 0.5%.

Rents have fallen by 4% in the last year. The CCR is down 5.7%, RCR rents are down 3.9%, and OCR rentals are down 2.1%. Rents for condos also fell, by 21 percent from the previous months and 7.7 percent year-on-year to 4,715 estimated units. The volume was 11,9 percent lower than the average for the past five months.

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According to region, 35.8% of the total private rentals came from the OCR. 32.8% were from RCR and 31.4% were from CCR. Condo rental market faces challenges due to a rise in retrenchment and an increase in available homes.

Renters have more options on the market and some landlords seem more open to discussing rental terms than they did a year ago.

Rents for HDB flats rose by 1 percent in February compared to the previous month. This is a new record high. However, the number of flats rented fell by 19.1% to 2,448 units, down from 3,027 in January.

Renters are seeking to reduce their inflation-related rents, and HDB housing is a good option for them.

He expects that both markets will see a rebound in the second quarter 2024, given the fact that the Chinese New Year celebrations in February were the main cause of the drop in rental volumes.

Rents for HDB flats on mature estates increased by 1.3 percent, while rents at non-mature estates rose 0.5 percent.

All room types saw a rise in rents month-on-month, with executive units (2.6%) and four-roomers (1.5%). The rents of three-room HDB flats increased by 0.4%, while five-room HDB flats saw a 0.3% increase.

HDB rental prices increased 8.4% on average over the past year.

All room types saw rent increases on a year-over-year basis. Executive rents increased by 9 percent, rents for four-room units rose by 8.5 percent, and rents for five-room units increased by 8.1 per cent. Rents of three-room apartments increased by 7.8 percent.

The rental figures for February are down 8.4% on the previous year and 6.9% below the average of the last five years.

Three-room HDB apartments accounted for 31.7% of the total volume. 25.4% of the monthly rental volumes were for five-room units, while 5.7% came from executive units.

The lower February rental volume could be attributed to the fact that more tenants are moving to larger HDB flats as a result policy changes. This may have led to higher rents on executive flats.

Experts predict that condo rents will bottom out in 2024’s first half and stabilize in the second, but he also believes HDB rents could rise by as much as 8 percent for the entire year. This is because tenants are looking for more affordable housing amid a reduced supply of flats that have reached the minimum occupancy period (MOP).

If private rents drop dramatically and compete with HDB, the limited supply of MOP flats could prop up HDB rental rates for a time.

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