HDB, condo rents climb in November amid seasonal fall in leasing volumes

SINGAPORE - Rental prices for both Housing Board flats and condominiums ticked up in November, even as volumes fell amid the year-end festive season.

Flash data from SRX and 99.co released on Dec 19 showed that condo rents increased 0.2 per cent from the previous month.

This was driven by a 0.8 per cent growth in the outside central region (OCR), which more than offset a 0.6 per cent decline in the core central region (CCR) and a 0.1 per cent fall in the rest of central region (RCR).

OrangeTee Group’s chief researcher and strategist Christine Sun noted this to be the second consecutive month that prices have increased in the private rental space.

“The private rental market’s recovery is anticipated to persist into 2025, with projected growth ranging from 2 to 4 per cent. This recovery is expected to be driven by improving macroeconomic conditions, increased employment opportunities and a constrained rental inventory,” she said.

Mr Luqman Hakim, chief data and analytics officer of 99.co, believes the month-on-month increase indicates a continued recovery following a downtrend in the first half of 2024, suggesting a “possible upward trend” for condo rentals in 2025, supported by an improved economic outlook.

Huttons Asia’s chief executive Mark Yip deemed the price growth in November “stable” and attributed it to less pressure on landlords to lower rents.

He believes private housing rents for 2024 could remain unchanged from the previous year’s levels, given firmer demand from an improving employment market.

With an estimated 5,010 units rented in November in 2024, volumes fell 12.3 per cent from 5,712 units the previous month.

The OCR contributed 36.3 per cent of total rental volumes, followed by 33.6 per cent from RCR and 30.2 per cent from CCR.

Ms Sun said the decline in leasing volume for condos was within her expectations, as many expatriates go on holiday during the year-end period.

“However, some expatriates may choose to renew their leases or enter into new lease agreements in December as they would want to secure a home before the new year begins. This trend was observed from past SRX data, where rental volume in December surpassed November’s in 2022 and 2023,” she added.

On a year-on-year basis, condominium rental prices decreased 1.3 per cent due to lower prices across the CCR (down 2.4 per cent), RCR (down 1.4 per cent) and OCR (down 1.5 per cent), though rental volumes were 0.8 per cent higher.

Public housing rents for November rose 0.4 per cent from the previous month’s levels, with prices in mature estates increasing by 0.2 per cent and non-mature estates by 0.5 per cent.

Four-room rental prices supported this growth with a 1.3 per cent increase, mitigating declines from five-room flats (down 0.7 per cent) and executive flats (down 1 per cent) as three-room rentals held steady.

The latest month-on-month increase in HDB rental prices resulted in a total increase of 4 per cent in the year to date.

Mr Yip pointed out that this was, however, still lower than the 10.1 per cent increase in HDB rent prices seen in 2023.

“Although HDB rentals are still more affordable than condo rentals, the substantial price difference continues to drive demand for HDB flats as an affordable rental option in the market,” said Mr Luqman.

Leasing volumes for public housing fell 13.8 per cent to an estimated 2,155 units from 2,499 in October. November’s HDB rental volumes in 2024 were also 18.3 per cent lower than the five-year average for the month.

By room type, 32.7 per cent of total rental volumes came from three-room flats, with 38.1 per cent from four-roomers and 24.1 per cent from five-roomers. Another 5.1 per cent were from executive flats.

Year on year, HDB rents were 4.2 per cent higher than the previous year, while volumes were down 20 per cent. All room types recorded year-on-year price increases, led by three-roomers (5.1 per cent) and four-roomers (4.1 per cent).

Executive flats booked a 3.6 per cent increase from November 2023 levels, and five-roomers rose 2.8 per cent.

Mr Nicholas Mak, chief research officer of Mogul.sg, said he sees signs of a pivot “from a tenants’ market to a landlords’ market”.

This is given stabilising condominium rental rates and volumes along with gradual improvements in the HDB rental index.

“In 2025, there will be fewer HDB flats that will reach the end of the five-year minimum occupation period and (become) eligible to be rented out compared with 2024. Hence, there would be a lower supply of new HDB flats available in the rental market, which could contribute to rental growth,” said Mr Mak.

THE BUSINESS TIMES