Condo and HDB flat rentals in Singapore rise again but at slower pace in January

SINGAPORE – Rents for condominiums and Housing Board flats continued to rise in January, but at a slower pace.

Condo rents climbed by 1.4 per cent from December, posting the lowest increase in the past 11 months, while HDB rents rose marginally by 0.6 per cent, according to flash figures from real estate portals 99.co and SRX released on Tuesday.

Condo rental volume fell 0.9 per cent from December, with an estimated 6,285 units in January, down from 6,345 in the previous month. Overall, the volume was down 15.3 per cent from the same period a year before.

Data showed that price growth in the condo rental market was led by a 1.8 per cent month-on-month increase in the core central region (CCR).

Rents for the rest of central region (RCR) and outside central region (OCR) rose by 1.7 per cent and 0.8 per cent, respectively.

Compared with the year-ago period, condo rents were up by 31 per cent in the CCR, 34.1 per cent in the RCR and 33.3 per cent in the OCR.

Overall, rents increased by 33.2 per cent from January 2022 to January 2023.

Property analysts attributed the slower price growth for both condo and HDB flats in January to fewer deals closed during the Chinese New Year holidays.

Tenants’ resistance could be another possible factor, said ERA Realty head of research and consultancy Nicholas Mak. “Both the HDB and private condo rental index had increased steadily since July 2020. Rental rates had reached record heights, causing great unhappiness to tenants,” he said.

He added that it would not be sustainable for rental rates to increase at the same breakneck speed as seen last year, when the non-landed housing index jumped by some 30 per cent year on year.

Mr Mak said that to manage rental costs, some tenants could be moving to cheaper locations.

Young people who moved out of their parents’ homes, when working from home was the norm, could also be moving back, contributing to the dip in leasing demand.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said: “Growth has slowed down probably because rents have already run up quite significantly over the past year.

“Rental growth may remain moderate as more private condominiums and BTO (Build-To-Order) flats will be completed this year. Locals renting temporarily will gradually shift into their new homes, freeing up some housing stock in the market. With more condos being completed, we can also expect more landlords to lease their newly built condos.”

Ms Sun noted that China’s reopening and expatriates returning from other countries could help to absorb some of the excess housing inventory, thus mitigating a steep rental fall. 

Meanwhile, HDB rental volume rebounded by 12.2 per cent from an estimated 2,513 units in December to 2,819 in January. 

Mr Pow Ying Khuan, head of research at 99 Group, noted that the HDB rental volume was still 5.9 per cent lower than the five-year average for January. “In terms of HDB rental index, it is rising by 0.6 per cent in the month – making this the lowest increase since 15 months ago.”

HDB rents climbed by 1.4 per cent in mature estates and 0.2 per cent in non-mature estates from December to January.

Rents rose by 1.3 per cent for three-room flats and 2.9 per cent for executive units, while four-room and five-room units were up by a marginal 0.1 per cent and 0.3​​ per cent, respectively.

Overall, HDB rents increased by 27.5 per cent compared with January 2022.