Condo, HDB rents climb again in December; slight easing possible in 2023 as supply rises

December marks the 24th straight month of growth for condo rents and the 30th for HDB rents. PHOTO: ST FILE

SINGAPORE - Rents for Housing Board flats and condominium units continued to climb in December, ensuring that 2022 ended as a landlords’ market, though some analysts note that an upcoming increase in units in 2023 may slightly ease the pinch felt by tenants.

Condo rents rose by 3 per cent in December, compared with November’s 2.8 per cent, with those in central Singapore growing at the fastest pace of 3.9 per cent, according to flash figures released on Tuesday by property portals and SRX.

HDB rents went up by 2.8 per cent in December, a faster pace than November’s 2.5 per cent.

This marks the 24th straight month of growth for condo rents and the 30th for HDB rents. Overall in 2022, condo rental prices increased by 34.4 per cent, while HDB rents went up by 28.5 per cent.

While rents are unlikely to fall drastically in 2023, some tenants could get a respite as the supply of rental units is expected to increase, following the completion of more homes in the light of the construction industry’s steady recovery since the Covid-19 pandemic, said some property analysts.

One Global Group senior analyst Mohan Sandrasegeran said that around 15,000 HDB flats are expected to complete their mandatory five-year minimum occupation period in 2023, which would allow owners to rent them out.

As some 20,000 Build-To-Order (BTO) flats are expected to be completed in 2023, they might also gradually alleviate pressure on the rental market from those owners who are renting in the interim, he added.

“An increase in supply can lead to more options for renters, which can in turn gradually lead to more moderate rental prices,” said Mr Sandrasegeran.

Furthermore, some 9,500 condo units were completed in 2022, an increase of 49.1 per cent from the 6,300 units in 2021, he said.

ERA Realty’s head of research and consultancy Nicholas Mak noted that the supply of private rental units is set to rise as around 17,400 units, excluding executive condominiums, are expected to be completed in 2023.

As a result, he expects the pace of condo rent growth to moderate to between 13 per cent and 19 per cent in 2023, compared with the 34.4 per cent growth recorded in 2022.

In December, condo rental volume rebounded after four months of steady decline, in line with trends in previous years where rental volume went up in December.

An estimated 6,345 units were rented in December, up 26.6 per cent from the 5,013 units rented in November, data showed.

OrangeTee & Tie’s senior vice-president of research and analytics Christine Sun said that some foreigners may have signed new contracts or renewed their leases before they went for their year-end holidays. Others may have signed contracts to lock in the rental rates before the year ends, she added.

Meanwhile, HDB rental volumes went up by 5 per cent in December, with an estimated 2,513 units rented compared with November’s 2,394. Overall, an estimated 32,776 HDB flats were rented in 2022, a 1.8 per cent increase from the year before.

Ms Sun said some HDB flat owners may take their time to consider a home upgrade, given the uncertain economic outlook in 2023 amid rising interest rates.

As a result, there may be fewer flats put up for rent, she said, adding that she expects HDB rents to grow by between 15 per cent and 18 per cent in 2023.

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