Condo, HDB rents rise at quicker pace in May; more units leased

This marks the 17th straight month of growth for condo rents and the 23rd for HDB rents. PHOTO: ST FILE

SINGAPORE - The rental prices for Housing Board flats and private apartments continued to rise last month, and more units were leased, reversing the drop from the month before.

Condominium rents rose at a quicker pace of 2.8 per cent than April's 2.3 per cent, according to flash figures from property portals and SRX released on Wednesday (June 15).

HDB rents climbed by 2.4 per cent compared with 1.9 per cent the month before.

This marks the 17th straight month of growth for condo rents and the 23rd for HDB rents.

Property analysts said rents are expected to increase in the coming months amid strong demand and low rental stock.

Huttons Asia chief executive Mark Yip said the return of foreign employment was stronger than expected, pushing up the demand for both condos and HDB flats.

"Some expatriates are asking their companies to provide more housing allowance to offset the relentless climb in rents," he said.

"This will add to the costs of doing business in Singapore and may affect the attractiveness of the Republic in the long run."

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 3.3 per cent. The suburbs accounted for 41.1 per cent of the total volume.

Year on year, condo rents are up 18.1 per cent from May last year, with rents in the suburbs rising by 19.7 per cent.

Housing stock is tightest in the suburbs and rents there may trend higher in the coming months, noted OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

"As rental prices continue to rise and inflationary pressures build up, we may expect more tenants to rent smaller units or move away from the city centre," she said, noting that private homes in the suburbs tend to come with cheaper rents.

Rents for HDB flats rose across all flat types in both mature and non-mature estates. Compared with May last year, HDB rents are 16.2 per cent higher.

Many tenants are signing two-year contracts to lock in a lower rental rate, while others are accepting longer leases to secure a unit of their choice, Ms Sun said.

Meanwhile, condo rental volume rebounded by 11.7 per cent to an estimated 4,185 units last month, compared with 3,748 in April.

More HDB flats were also leased last month, up by 8.4 per cent to an estimated 1,617 units, compared with 1,492 the month before.

ERA Singapore head of research and consultancy Nicholas Mak noted that even though more units were leased, the overall trend is that rental volume is declining gradually.

Compared with May last year, the number of condo units rented out dropped by 23.7 per cent, while HDB rental volumes dipped by 17.3 per cent.

The high rental demand last year was driven by Covid-19 restrictions and work-from-home arrangements, Mr Mak said.

"Some people, especially the younger workers, who needed more space would move out of their parents' homes to rent flats or condo units with their friends," he added.

"However, in recent months, more people are returning to work in the office. As a result, the leasing demand from locals has weakened, which led to the gradual overall decline in rental volume."

He added that rental vacancies left by locals will be filled by new expatriates arriving in Singapore.

Join ST's Telegram channel and get the latest breaking news delivered to you.