SINGAPORE - Rental prices for Housing Board flats and private apartments continued to rise last month, with analysts noting that the trend will continue as completed housing projects are unable to catch up with demand.
HDB rents climbed at a slower pace of 1.5 per cent in July, compared with June's 2.3 per cent, with rents across all flat types in both mature and non-mature estates rising, according to flash figures from property portals 99.co and SRX released on Thursday (Aug 11).
Condominium rents went up by 1.7 per cent last month, compared with 2.1 per cent the month before.
This marks the 19th straight month of growth for condo rents and the 25th for HDB rents - the longest streak for both markets.
The previously longest recorded growth streaks in 99.co and SRX’s rental indexes were 14 months for condo rents, from July 2006 to August 2007, and 19 months for HDB rents, from February 2010 to August 2011.
Property analysts said rents are expected to increase over the rest of the year amid strong demand and low rental stock.
ERA Realty's head of research and consultancy Nicholas Mak said that some couples are renting HDB flats while waiting for their Build-To-Order (BTO) flats to be completed.
However, the completion of BTO flats is still being delayed due to supply chain disruptions, he added.
"At the same time, the easing of travel restrictions this year also led to an increase in foreigners arriving in Singapore for work or education, resulting in an increase in leasing demand," he said.
More tenants are accepting the increased rents, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun.
She said: "This could be because they are aware that housing stock is lacking in the market and demand will continue to grow.
"Foreigners and permanent residents who have just returned from overseas have to accept the higher rental costs as they do not have other housing options."
Condo rents increased across the board - in central Singapore, city fringes and the suburbs - with those in the suburbs climbing at the fastest pace at 2.2 per cent. The suburbs accounted for 38.1 per cent of the total volume of units leased.
Year on year, condo rents have risen by 23.5 per cent from July last year, with rents in the suburbs rising by 26.3 per cent.
HDB rents are 19.1 per cent higher compared with July last year, with five-room flats rising by 20.9 per cent.
Meanwhile, condo rental volume rose by 5.3 per cent to an estimated 4,809 units last month, compared with 4,568 units in June.
More HDB flats were also leased last month, up by 11.1 per cent to an estimated 1,762 units, reversing the drop from the month before.
Huttons Asia chief executive Mark Yip noted that rental price increases slowed down last month, dampened by the marked increase in the number of condo and HDB flats completed in the second quarter of 2022.
"As new supply comes into the market, it helps to ease the magnitude of rental increases," he said.
But Mr Mak said rental stock is expected to decrease as more condos are sold through collective sales and would be demolished for redevelopment.
"The private and HDB residential leasing market is hit by the perfect storm of rising demand and stagnant supply, leading to strong upward pressure on rental rates," he added.
"Unless there is a major change in the macroeconomic climate, the current situation in the residential leasing market could persist in the next six to 12 months."