Condo rents dip 0.4% in April while HDB rents inch up 0.3%

SINGAPORE – Rents for private apartments resumed their downward trend in April even as more units were leased, while prices in the Housing Board rental market continued to climb.

Condominium rents were down 0.4 per cent in April, continuing a general downward trend from July 2023 despite a slight increase in March, flash data from real estate portals Singapore Real Estate Exchange (SRX) and 99.co showed on May 17.

Mr Eugene Lim, key executive officer of real estate firm ERA Singapore, said the dip in condo rents was led by rental falls in the suburbs.

“With the majority of the recently completed units located in the outside central region, we are seeing more aggressive competition for tenants,” he said.

Compared with April 2023, condo rents were down 4.6 per cent, with rents in the prime district, or core central region, decreasing the most at 5.2 per cent.

Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said the drop in rental prices would benefit expatriates.

“The declining rental prices will make Singapore more attractive for multinational companies, which in turn will bring in more expats to work in Singapore,” she added.

Condo rental volume inched up 3.1 per cent to an estimated 5,874 units in April. While the number of units leased was up 4.4 per cent year on year, it was still 6 per cent lower than the five-year average for April.

Mr Mark Yip, chief executive of property firm Huttons Asia, attributed the rise in condo leasing volumes to some landlords deciding to rent out their units quickly and compromise on their asking prices, rather than leave their units empty.

ERA’s Mr Lim said one- and two-bedroom condos formed a higher proportion of rental transactions in April, as tenants opted for smaller units to manage rental expenses amid an uncertain economic situation.

In contrast, HDB rents edged up 0.3 per cent in April, climbing at a slower pace compared with the 0.6 per cent rise in March.

Ms Sun said there was a limited supply of units available for rent, with fewer flats reaching their five-year minimum occupation period since 2022, which pushed rents higher.

“Demand has remained resilient as some tenants will still opt for HDB flats, which continue to offer the most affordable housing option in the market,” she added.

Rents for flats in mature estates were up 0.7 per cent, while those in non-mature estates slid 0.3 per cent.

Five-room flats commanded lower rents in April, declining by 0.4 per cent. The other flat types – three- and four-room flats, and executive apartments – recorded slight increases.

Compared with April 2023, HDB rents were up 7.6 per cent, climbing across all flat types in both mature and non-mature estates.

Ms Sun said she expects rental demand for HDB flats to remain robust, supported by local residents as well as foreign students and blue-collar workers.

More HDB flats were leased in April, rising 9.2 per cent to an estimated 2,941 units.

However, rental volumes in the HDB market were down 9.5 per cent year on year, and were 9.7 per cent lower than the five-year average for the month of April.

Mr Lim noted that the rental gap between HDB flats in non-mature estates and condo units in the suburbs has continued to narrow.

For instance, rents for a three-bedroom condo unit in Sengkang ranged from $3,700 to $4,500. In comparison, median rents for HDB five-room or executive flats in the estate ranged from $3,350 to $3,600.

“Tenants may find better value in renting a condo for slightly higher rents,” he added.

Mr Yip said he expects condo rents to decline further in the second half of 2024 amid high inflation, and HDB rents to grow at a slower pace due to tenants resisting higher rents.