SINGAPORE - The rental volumes for Housing Board (HDB) flats and condos rebounded in March after declining for several months while rents continued to rise.

HDB rents last month hit a new high - surpassing the previous peak in August 2013 by 1 per cent. Condo rents were 0.8 per cent off the peak in January 2013.

Industry observers attribute this to the easing of safe management measures, which facilitated viewings, and the return of foreign workers and expatriates after Singapore reopened its borders.

The condo rental volume climbed by 21.2 per cent to an estimated 4,683 units last month, compared with 3,863 in February, according to flash figures from real estate portals 99.co and SRX released on Wednesday (April 13).

More HDB flats were leased last month, up by 31.3 per cent to an estimated 1,767 units, compared with 1,346 the month before.

Condo rents rose at a quicker pace of 2.9 per cent compared with February’s 1.4 per cent, and HDB rents rose by 1.4 per cent compared with 1.7 per cent the month before.

This marks the 15th straight month of growth for condo rents and the 21st for HDB rents.

Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said: “In recent weeks, we noticed an increase in inquiries and units leased to Malaysian workers after border restrictions were eased.”

Huttons Asia chief executive Mark Yip said short-term incremental demand from tenants, who extended their leases due to delays in completion of their new homes, boosted rental volume for condos in March.

More Hong Kong expatriates are taking short-term leases in Singapore to sidestep strict Covid-19 restrictions there, he added.

“As rents for short-term stay tend to be higher than the typical lease term, this pushed rents up by 2.9 per cent, much higher than the increase in previous months,” he said.

Demand for rental condos increased across the board - in central Singapore, city fringes and the suburbs. The suburbs accounted for 39.1 per cent of the total volume.

Year on year, condo rents are up 14 per cent from March last year.

Rents for HDB flats rose across all flat types in both mature and non-mature estates. Compared with March last year, HDB rents are 13.5 per cent higher.

The lower supply of newly completed homes contributed to increased rental rates, said ERA Singapore head of research and consultancy Nicholas Mak.

“The continuing rise in rental rates and lower volumes point to the delays in the completion of residential properties due to supply chain disruption in the construction industry,” he added.

Ms Sun said foreign employment is expected to pick up across many industries, which will fuel leasing demand and rental growth.

“We anticipate that (condo) rents will likely hit a new high within the next few months,” she added.
 

Mr Mak expects rents in both markets to rise between 6 per cent and 10 per cent over the rest of the year, while Mr Yip estimates an increase of between 5 per cent and 8 per cent.

Property agent Shaun How from Huttons Asia said he has seen a two-fold increase in inquiries from foreigners looking to rent HDB or condo units here since travel restrictions eased on April 1.

“Most of them are from Malaysia, India and China, who are relocating here for work. Many owners are also requesting higher rents islandwide - 50 per cent higher than the usual rent,” he said.

Mr Robert Chuahan, 30, a mechanical engineer, has been looking to rent a two-bedroom unit in an HDB or a condo with his friend since last October.

“The prices have soared so high that it is  difficult to find any place with our budget of less than $2,300. When we found some, the owners were either not keen on renting to Indians, or did not allow cooking even for light food,” he said.

He said he came across studio apartments that were asking between $2,200 and $3,200 - too expensive and too small.

“I am currently in a co-living apartment and the contract ends in May. If I can’t find a place, I will need to extend it,  but rent there has also increased from $1,250 to $1,350 in January,” Mr Chuahan added.

Some experts said the rising trend could turn soon though. Ms Sun said some Malaysians residing in Singapore may not renew their rental leases since those who are fully vaccinated can travel freely between the two countries by land without testing or quarantine.

Mr Mak said the rental volume, especially in northern Singapore such as Woodlands and Sembawang, could decline in the next few months. He expects this to last for a short term before new tenants arrive.