Condo, HDB rental volumes on the downtrend in September: SRX, 99.co

SINGAPORE – Rental volumes for condo units and HDB flats fell in September, extending the drop in August.

Rents for HDB flats edged up again, while condo rents continued to fall, based on flash estimates from SRX and 99.co released on Friday.

Data showed that condo leasing volumes slid 15.2 per cent to 5,713 units rented, from 6,736 units in August. Volumes were down 12.7 per cent year on year, and lower than the five-year average volume for the month of September.

About 35.7 per cent of total volumes came from the Outside Central Region (OCR), followed by 33.1 per cent from the Rest of Central Region (RCR) and 31.1 per cent from the Core Central Region (CCR).

In the Housing Board market, volumes slipped 7.8 per cent on month to 2,763 flats rented, from 2,998 units previously. Year on year, volumes rose 20 per cent and were 5 per cent higher than the five-year average volume for September.

ERA Singapore key executive officer Eugene Lim said the softer demand in the HDB rental market is due mainly to the onslaught of new condo completions in recent months.

Based on SRX and 99.co data, 37.4 per cent of units leased were four-room flats, followed by three-room flats at 32.8 per cent, five-room flats at 24.3 per cent and executive flats at 5.5 per cent.

Rents for HDB flats inched up 0.4 per cent on month, continuing a sideward trend, and were up 18.2 per cent year on year. Both mature and non-mature estate rents rose 0.3 per cent on month. Mature estate rents advanced 17.2 per cent, and non-mature rents gained 19.2 per cent on year.

The market is supported by demand from foreign students and foreign workers looking for affordable rents, said Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.

There were also fewer homes available for lease, as cooling measures resulted in fewer owners upgrading to private housing. However, the drop in supply could be mitigated by locals vacating their rental units and moving into their new homes.

Rentals of nearly all room types went up month on month. The rents of three-room and four-room flats edged up 0.1 per cent, while that for five-room units rose 2.1 per cent. In contrast, executive flat rents lost 0.8 per cent.

All room types recorded rental increases year on year. The bigger flats had the greatest jumps, with five-room flats at 21.6 per cent and executive flats at 19.5 per cent. Four-room flat rents followed with an 18.2 per cent climb, while three-room flat rents rose by 15.7 per cent.

Condo rents, meanwhile, fell 0.5 per cent from August. Year on year, overall rents were up 13.9 per cent.

“With little incremental demand to absorb the new supply of condos, landlords came under more pressure to retain tenants in September 2023,” said Huttons chief executive Mark Yip on the fall in rents.

The price correction did not surprise OrangeTee’s Ms Sun, who noted that rents rose “too high and too rapidly” in 2022. This resulted in tenants moving elsewhere in search of more affordable accommodation.

Rents in the CCR rose by 0.5 per cent. But RCR rents dropped by 0.2 per cent and 1.3 per cent in the OCR. Rents increased year on year by 11.1 per cent in the CCR, 14.9 per cent in the RCR and 15.7 per cent in the OCR.

THE BUSINESS TIMES