Condo, HDB rents up in September; strong demand ensures landlord's market

This marks the 21st straight month of growth for condo rents and the 27th for HDB rents. PHOTO: ST FILE

SINGAPORE - Rents for Housing Board flats and private apartments picked up pace last month, with analysts noting that more pressure could be placed on the rental market after the latest round of cooling measures.

HDB rents climbed by 3.2 per cent in September, compared with August's 2.4 per cent, with rents across all flat types in both mature and non-mature estates rising, according to flash figures released on Wednesday by property portals and SRX.

Condominium rents went up by 3.3 per cent last month, compared with 3.2 per cent the month before, with those in the city fringe growing at the fastest pace at 3.9 per cent.

This marks the 21st straight month of growth for condo rents and the 27th for HDB rents.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said although rents have been rising, demand remains strong as it is still a landlord's market.

"With few housing options available, many tenants have acceded to paying the higher asking rents. Even older properties and less accessible homes are in demand and able to fetch quite attractive rents," she said.

Year on year, condo rents have surged by 30.9 per cent from September last year, with rents in the city fringe up by 31.8 per cent.

HDB rents are 24.7 per cent higher compared with September last year, with five-room flats lodging a 27.9 per cent jump.

Ms Sun said the double-digit increases across both markets can be considered substantial given the short period of time.

Meanwhile, condo rental volume picked up pace, rising by 9.8 per cent to an estimated 4,760 units last month, reversing the drop from the month before.

The number of units leased rose by 1.9 per cent year on year and was 5.6 per cent higher than the five-year average for the month of September.

Slightly more HDB flats were leased last month, up by 0.3 per cent to an estimated 1,809 units, compared with 1,803 in August.

Rental volumes in the HDB market rose by 5.1 per cent year on year and were 0.9 per cent higher than the five-year average for the month of September.

Huttons Asia chief executive Mark Yip said the successful launch of two projects last month - Lentor Modern in Ang Mo Kio and Sky Eden@Bedok - resulted in stronger demand for rental homes.

He said: "Some HDB upgraders may have chosen to sell their flat and rent for the moment so that they do not need to pay the ABSD (additional buyer's stamp duty).

ERA Realty Network chief executive Marcus Chu added that employers are hiring more foreign talent, given the tight local labour market as the unemployment rate has fallen.

Mr Yip said: "At the same time, there was also hiring from companies to make up for the talent gap."

Mr Pow Ying Khuan, head of research at 99 Group, said that although more than 31,000 HDB units are estimated to reach their five-year minimum occupation period this year, these owners might choose to stay put before deciding on their next step.

"This could exacerbate the supply crunch in the HDB rental market, until demand reaches its peak," he added.

Ms Sun said she expects rents to rise further as landlords have passed additional costs such as rising interest rates to their tenants.

"With the impending GST (goods and services tax) increase and higher property taxes next year, we may expect rents to rise further," she added.

Mr Yip said rents are estimated to rise by up to 10 per cent in the fourth quarter of 2022, and will likely spill over to 2023 in the wake of cooling measures.

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