Condo, HDB rents continue decline amid pandemic

Rents for private apartments and Housing Board (HDB) flats continued their decline amid the Covid-19 pandemic, according to flash data released by real estate portal SRX Property yesterday.

In the private rental market, rents last month dipped 0.6 per cent from May. Year on year, private rents last month fell for the Core Central Region and Rest of Central Region by 0.7 per cent and 2.2 per cent respectively. Overall, rents for the condo market were down 18 per cent from their peak in January 2013, SRX data showed.

For the HDB rental market, rents last month fell by 0.5 per cent from May. Year on year, HDB rents fell by 2 per cent and were 16.1 per cent down from their August 2013 peak.

The decline in HDB and condo rental rates for four months since February illustrates the negative effects of the Covid-19 outbreak, said ERA Realty head of research and consultancy Nicholas Mak.

Ms Christine Sun, OrangeTee & Tie's head of research and consultancy, noted that the decrease in rents is considered marginal.

"Rents are still rather resilient in many areas, based on our ground observation that there are more people renewing their contracts or renting new apartments in recent months," she said. "The drop from 2013 peaks in rent for HDB flats and condo units is the result of an increase in supply of such units."

The SRX data showed that the number of non-landed private homes leased rose by 54.4 per cent to 4,473 units last month from 2,897 in May. June's rental volume for these private apartments is still 13 per cent lower from a year ago, and 4.3 per cent off the five-year average volume for the month.

In the HDB rental market, the number of flats leased rose last month by 55.7 per cent to 1,869 flats, compared with 1,200 in May.

HDB rental volumes last month were down by 6.6 per cent from a year ago. They were also 1.2 per cent lower than the five-year average volume for the month.

Of the rentals last month, 35.3 per cent were for four-room flats, 33.9 per cent for three-room units, 25.4 per cent for five-room units and 5.4 per cent for executive flats.

Ms Sun said: "The increase (in rental volume) could be attributed to more rental renewals as many expats are not able to travel to another city due to travel restrictions.

"Also, some employers are seeking longer-term housing arrangements for their workers who were commuting daily from Malaysia, but are unable to do so as a result of the border lockdowns."

Looking ahead, observers say the rental market could continue to be dampened by the economic outlook, even as more Singaporeans are renting apartments.

"We have observed more Singaporeans, especially singles, renting an apartment to enjoy greater privacy and autonomy," said Ms Sun. "It could be more viable for them to rent since they may not be eligible to buy an HDB resale flat or afford a private condo now."

Mr Mak said some leasing demand could be lost as some foreigners leave Singapore, such as those who have lost their jobs. He says leasing demand this year for private apartments and HDB flats could drop by 2 per cent to 4 per cent.