SINGAPORE - Rents for condominium units increased by 1 per cent in April after a dip in March, while rents for Housing Board (HDB) flats inched up by 0.8 per cent.
The number of condo units rented out rose by 13.8 per cent, with an estimated 5,598 units leased, up from 4,920 units in March.
An estimated 3,183 HDB flats were rented out in April, up 5.8 per cent from 3,009 units in March, according to flash figures released on Wednesday by property portals 99.co and SRX.
Huttons Asia chief executive Mark Yip said the increase in rental volumes reflects that landlords are willing to meet tenants’ demands for smaller rent increases.
That said, ERA Realty Network key executive officer Eugene Lim noted that landlords are still expecting high rents to cushion the effect of higher monthly mortgage payments.
Rents in the city fringes increased by 1.7 per cent, while those in the suburbs went up by 1.6 per cent. On the flip side, rents of flats in central Singapore decreased by 0.2 per cent.
Mr Lim said escalating rents in central Singapore have compelled some tenants to relocate to similar-sized units in the city fringes, which led to a slight drop in demand for flats in the city area. For instance, in April, a four-bedroom unit at Ardmore Residence, located in Orchard, commanded a monthly rent of $38,000, while a similar-sized unit at Caribbean at Keppel Bay could be rented for $14,000 per month.
Mr Nicholas Mak, chief research officer at Mogul.sg, predicts that condo rents will peak in 2023 as the supply of private housing units is set to surge, with about 17,400 units projected to be ready in 2023, and another 10,500 in 2024.
Mr Luqman Hakim, chief data and analytics officer at 99.co, said the increase in condo rental volumes could be due to demand from foreign tenants, after rents fell by 0.3 per cent in March.
He expects rental demand to increase over the next few months, as the recent hike in additional buyer’s stamp duty (ABSD) rates for those purchasing residential properties could have prompted some potential foreign buyers to switch to renting instead.
In the HDB rental market, rents increased for the 34th consecutive month. Flash data showed that HDB rents have increased by 26.1 per cent on a year-on-year basis.
Mr Lim cited the decline in the number of rental HDB flats reaching their five-year minimum occupation period (MOP) as one reason behind the slight uptick in April’s rents. Flats cannot be rented out during the MOP.
He attributed the increase in HDB rental volume to some tenants – particularly those living in condos in the suburbs – moving to HDB flats due to the high rents charged by private residential landlords.
Looking forward, both the condo and HDB markets could see an increase in rental volumes in the second half of 2023 due to the ABSD rate hikes, Mr Yip said.
He added that more foreigners are expected to rent units, while HDB upgraders – people selling their first HDB home and upgrading to a private property that requires renovation – are likely to rent a condo or HDB unit while waiting for their new home to be ready.
