More HDB flat owners renting out units

Experts trace the increase in subletting transactions for HDB flats to a rule introduced three years ago, which mandates that private property owners must sell their existing property if they buy an HDB resale flat.
Experts trace the increase in subletting transactions for HDB flats to a rule introduced three years ago, which mandates that private property owners must sell their existing property if they buy an HDB resale flat.ST FILE PHOTO

They are retaining their flats 'even as they upgrade to private property'

More Housing Board flat owners have been renting out their units in recent months - a phenomenon attributed to upgraders who want to keep their flats even as they move on to private property.

HDB figures last month showed a 6 per cent rise in subletting transactions between the first and second quarters of this year, from 7,410 cases to 7,891.

The number of transactions in the second quarter was also about 15 per cent higher than the 6,900 cases in the same period last year.

More flats were also rented out last month - 1,760 according to Singapore Real Estate Exchange (SRX) estimates, up 27 per cent from 10 months ago.

Industry watchers said this is because there are more upgraders who own private property and want to rent out their HDB units for additional income.

Mr Chris Koh, director of property firm Chris International, traces this to a rule introduced three years ago, which mandates that private property owners must sell their existing property if they buy an HDB resale flat.

That is why some HDB owners with private property prefer not to sell their flats, he said. They cannot buy a resale flat once their HDB unit is sold while still holding on to private property.

HDB owners who have lived in their flat for the minimum occupation period are allowed to purchase private property and hold on to both at the same time.

The move towards renting out HDB flats is also fuelled by the large number of private units that are being completed this year - especially shoebox units, said R'ST Research director Ong Kah Seng.

"Many singles who have been staying with their parents in HDB flats have moved into the shoebox apartment they bought," he said. "The room they vacated can be rented out."

Entire flats are also freed up when aged parents move into a married child's home, he added.

One such person is semi- retired cashier Ang Ling Buang, 73, who began renting out his five-room flat in Hougang to an Indonesian family in March.

Mr Ang now lives with his wife in his son's Punggol flat, where he helps to take care of his grandson. He gets $2,600 in rent monthly.

For now, the increased supply has not had an impact on monthly median rent prices, which have stayed at $2,400 over the past year, SRX data showed.

Demand for HDB rentals is still robust because public flats are cheaper to rent than private ones of similar sizes.

This is especially appealing to foreigners, said ERA Realty key executive officer Eugene Lim, as their rental budgets are often part of their salary packages.

"So to save money, more foreign employees are renting from the HDB market," he said.

Moreover, tenants sharing a room can save even more. "The rooms in many old HDB flats are very spacious, suitable for tenants to share," said Mr Ong.

But even with the increased supply of flats for rent, some landlords are still picky about tenants.

Mr Koh said most Singaporean flat owners prefer renting out to "good profile tenants" like couples with children. But those looking to rent in areas like Woodlands, Sembawang and Marsiling are mainly workers who want to share a flat or room.

"I've heard from agents on the ground that it now takes two months to rent out HDB flats that would have previously been rented out in two weeks," he said.

charyong@sph.com.sg