SINGAPORE - Rents for Housing Board flats and private apartments climbed in October as demand rose further following the latest round of cooling measures, with more tenants turning to HDB flats for comparatively lower rents.
HDB rents grew by a slower pace of 1.8 per cent in October, compared with September’s 3.3 per cent, with rents of executive flats rising the fastest at 6.1 per cent, according to flash figures released on Wednesday by property portals 99.co and SRX.
More HDB flats were rented out in October, with volume rising 10.3 per cent to an estimated 1,995 units compared with the 1,809 in September.
Condominium rents went up by 2.7 per cent in October, compared with 3.3 per cent in September, with rents rising across the board in all three regions – central Singapore, city fringes and suburbs. However, rental volume decreased by 8.7 per cent to an estimated 4,355 units from 4,771 units in September.
October marks the 22nd straight month of growth for condo rents and the 28th for HDB rents – the longest streak for both markets.
Property analysts said the surge in HDB rental volume suggests that more tenants are eschewing condo units and turning to HDB flats for comparatively cheaper rents, as strong rental demand continues to push prices up in both segments.
Huttons Asia chief executive Mark Yip said those caught out by the cooling measures likely have resorted to renting an interim home, which propped up the HDB rental market.
Since Sept 30, private property owners must wait 15 months after the sale of their current private property before they can buy an HDB resale flat without housing grants. Previously, they were allowed to buy a resale flat on the open market if they sold their private property within six months of the flat purchase.
“Since their intention is to move to an HDB flat, they have turned to the HDB rental market and pushed up demand and rents in October,” said Mr Yip.
That rents of executive HDB flats, which are typically favoured by private property downgraders for their generous floor area, grew by 6.1 per cent is proof that the rental market is further boosted by this group of downgraders, said analysts.
Mr Pow Ying Khuan, head of Research at 99 Group, said: “The huge increase in rent for executive flats signals a higher demand for more space.”
In October, the overall median monthly HDB rent was $3,000 for an executive flat, $2,800 for a five-room flat, $2,600 for a four-room flat and $2,300 for a three-room flat.
The Straits Times reported in October that the current rental boom has caused some desperate renters to put in higher-than-usual offers to entice landlords or resort to putting deposits on units without a physical viewing to beat the competition.
Property agents told The Straits Times that any available rental units are usually snapped up quickly, compared with pre-Covid-19 years, with landlords calling the shots and having their pick of tenants.
OrangeTee & Tie chief executive Steven Tan said landlords may have increased their asking rents in line with rising interest rates and growing inflation.
“With an overall tight housing situation, renters may have no choice but to accept the increase in rents. In the light of an increase in the goods and services tax in 2023, property tax and interest rates, we anticipate rental prices to continue climbing as landlords continue to pass on the increase in costs to their tenants,” said Mr Tan.
As more condo projects are slated to finish construction in 2023 and add to the condo rental pool, Mr Tan said rental prices may rise at a slower rate. However, those who are looking for more affordable options may continue to turn to the HDB rental market instead, where rents may remain elevated.
