Condo and HDB rents rise in June; more units leased out

SINGAPORE - Rents for condominium units inched up 0.3 per cent in June after

a slight dip of 0.6 per cent in May

, as the number of units leased out rose by 12.5 per cent.

An estimated 5,810 units were leased out in June, up from 5,164 units in May, according to flash figures released on Monday by property portals 99.co and SRX.

Year on year, rents went up by 24 per cent while rental volumes were down 3.9 per cent.

Separately, rents for Housing Board flats climbed 1.4 per cent in June, and by 24.6 per cent compared with June 2022.

An estimated 2,990 flats were rented out, a 4.6 per cent increase from May’s 2,859 units, and up 4.2 per cent year on year.

Ms Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics, said private rental growth “continues to trend sideways” for the fourth consecutive month, indicating that rents may be stabilising.

She cited increasing pressure on landlords arising from the rising supply of housing units and slowing rental demand as possible reasons.

Housing supply has increased, with 4,227 private homes completed in the second quarter of 2023, up from 2,864 units in the first quarter, she noted, adding that more HDB flats have also been completed.

99.co and SRX flash data showed that condo rents in the prime area increased by 0.8 per cent in June, while rents in the city fringe fell by 0.6 per cent, and those in the suburbs, by 0.2 per cent.

ERA Realty Network key executive officer Eugene Lim said the slight rise in rents may be a result of most landlords asking for higher rents to pay off the higher interest on their mortgage.

He said more foreigners are renting instead of buying units – particularly in the prime districts – due to the doubling of

additional buyer’s stamp duty rates

to 60 per cent in April.

Huttons Asia chief executive Mark Yip said some foreigners may have chosen to rent while waiting for their permanent resident or citizenship applications to be approved before buying homes.

He added that the increase in supply of homes completed in the city fringe and suburbs in recent months, coupled with a quiet labour market, may have led to rents falling in those areas.

On the HDB front, Mr Luqman Hakim, chief data and analytics officer at 99.co, said some rental demand has shifted from condos to more affordable HDB units, specifically to bigger units. Rents for HDB executive flats – the largest flat type – had the highest year-on-year increase of 27.9 per cent, he noted.

“HDB landlords can still afford to increase their prices as condo rental prices maintain their all-time highs,” he added.

Rents for three-room, four-room, five-room and executive flats rose by 1.5 per cent, 1.8 per cent, 0.2 per cent and 2.2 per cent, respectively, in June.

Year on year, rents were up by 22.1 per cent for three-room flats, 25.1 per cent for four-room units, and 26.5 per cent and 27.9 per cent for five-room and executive flats, respectively.

Mr Lim said more renters who may have been priced out of the condo rental market have opted for HDB flats instead.

He cited how a three-bedroom condo unit at Commonwealth Towers can command rents as high as $8,100 per month, compared with around $4,000 for a five-room HDB flat in Queenstown.

Mr Yip said there has been a significant number of new launches in May, which prompted HDB upgraders to sell their current flats and rent HDB units in the interim while waiting to move into their new homes.

Looking forward, he noted that more housing units will be completed in the second half of the year, which could further stabilise the growth in rents.

Mr Yip estimated that condo rents may rise at a slower rate of between 10 per cent and 15 per cent in 2023, compared with the 29.7 per cent increase in 2022. Rents of HDB flats may increase by around 10 per cent this year, he added.

Ms Sun said HDB rents could trend down when more local renters move into their new flats and more private homes are completed.