Condo and HDB rentals in August continue growth trend, more units leased

The figures mark the 20th straight month of expansion for condo rents and 26th for HDB rents. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Rentals for Housing Board (HDB) flats and private apartments picked up pace last month, with analysts noting the trend shows no sign of letting up.

HDB rents climbed by 2.4 per cent in August, compared with July's 1.5 per cent, with rents across all flat types in both mature and non-mature estates rising, according to flash figures released on Wednesday by property portals and SRX.

Condominium rents went up 3.2 per cent last month, compared with 1.7 per cent the month before, with those in central Singapore growing at the fastest pace at 3.7 per cent.

The figures mark the 20th straight month of expansion for condo rents and 26th for HDB rents.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said: "As the tight housing situation is not expected to be alleviated soon, rental prices may continue to rise or be propped up at current levels in the coming months."

Year on year, condo rents have surged by 27.5 per cent from August last year, with rents in the suburbs up 28.2 per cent.

HDB rents are 21.6 per cent higher compared with August last year, with five-room flats notching a 22.9 per cent jump.

Noting that the year on year rise is "astonishing", ERA Realty's head of research and consultancy Nicholas Mak said this could be attributed to more foreigners arriving in Singapore after Covid-19 restrictions were relaxed in April.

Last month, there was a rise in demand from foreign students and expatriates in information technology, banking and healthcare as hiring ramped up, added Huttons Asia chief executive Mark Yip.

Tenants displaced by successful collective sales added to the rental demand, driving up rents across all housing types, he added.

Meanwhile, condo rental volume rose by 0.4 per cent to an estimated 4,524 units last month, reversing the drop from the month before.

But the number of units leased declined by 6.3 per cent year on year and were 8 per cent lower than the five-year average for the month of August.

More HDB flats were also leased last month, up by 3.8 per cent to an estimated 1,765 units, compared with 1,700 in July.

Rental volumes in the HDB market dropped by 1.3 per cent year on year and were 3 per cent lower than the five-year average for the month of August.

Mr Mak said the slight month on month increase indicated that rental volumes are stabilising.

"Although the number of foreigners coming to Singapore to work, live and study continued to rise in the past few months, the number of local residents who rent flats and condominiums is not increasing," he added.

"One of the reasons is that the rising rental rates are also putting a financial burden on many young locals who are thinking of renting their own places."

Ms Sun said some tenants, especially locals who do not need to rent urgently, may not renew their leases amid the escalating prices and move back to stay with their families.

"We do not expect rental demand to rebound too significantly due to some price resistance, unless there is a significant ramp-up in foreign employment, which may push rental demand higher," she added.

As Singapore moves to attract top foreign talent with the new Overseas Networks and Expertise Pass, which has a criterion of $30,000 in fixed monthly salary, analysts said this could spur leasing demand for high-end properties.

Mr Mak said: "Although these highly paid foreigners will be in the minority... the signs are pointing to upwards pressure on rental rates in both the HDB and private housing markets in the short term."

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