Singapore HDB leasing market grows in December 2023

The price of condominium rentals fell for the fifth month in a row last December. This wiped out all the gains seen during the first half 2023. HDB’s rental market continued to grow in terms of both rents and lease volumes.

Flash data released by SRX on Thursday (18 January) showed that condo rental prices fell 0.5 percent from the previous months, with rental declines across all regions.

The overall condo rents are still 2.6% higher than December 2022 levels. Rents in Outside Central Region (OCR), Rest of Central Region(RCR), and both were higher by 4,4% and 2,6% respectively. Rents in the Core Central Region (CCR), however, were up by 0.9 percent on an annual basis.

The decrease in private rental properties in December was milder than in November, likely due to a slight increase in demand for new employees starting in the new calendar year.

In 2024, landlords will be forced to pay the highest property taxes and annual value increases. Currently, interest rates are high, so more landlords will opt to accept lower rents rather than leave the unit vacant.

Rents are falling in the private sector.

Analysts expect that private rental prices will continue to decline in 2024.

Rental rates for private residential properties may decrease 10 to 15% in the next 12 months as the dynamics of supply and demand continue to normalise.

The number of condominiums leased increased by 14 percent on the month, to 5,644 units.

As seen in 2022 and 20, the increase could be attributed to a greater number of landlords who are willing to accept lower rental rates, or to more lease renewals occurring before the start of the new year. The demand will probably continue in January 2024, as tenants sign new leases and renew leases.

Rental volumes fell by 11,6% on an annual basis. The volume was 12.6% lower than the average for the past five years. The OCR represented 38.2 percent of total leasing volume, followed by the RCR (33.6%) and the CCR (28.1%).

All HDB rooms are experiencing rising rents

HDB’s rental market continues to grow with a 1 percent increase in rents. The rental prices of mature estates increased by 1.2 percent, while the rents in non-matured estates rose by 1 percent.

Rents rose for all room types, with the three-room apartment gaining 2.1%, followed by executive flats (0.9%), four-roomers (0.1%), and five-roomers (2.1%).

Overall HDB rents increased by 10.1% in the past year. Rents for mature estates rose 10.4 percent, and those of non-matured estates rose 10.3 percent.

The largest increase in rental prices was recorded by executive flats at 14.7%, followed closely by five-roomers (10.7%), three-roomers (10.5%), and four rooms (8.9%).

HDB’s leasing volume increased by 7.4 percent to 2,891 units estimated in December from 2,693 in November.

The December volume was 0.1 percent lower than average for the past five years.

The most common flat size was four rooms, accounting for 36.2% of all leasing transactions. Three-roomers accounted for 34.1%, followed by executive flats (5.7%) and five-roomers (24%).

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Analysts have mixed opinions about the HDB market’s outlook for 2024, despite its growth.

Analysts expect the HDB rental housing market to remain resilient, with an average rental growth of 8 to 10% in 2024.

HDB expects rents to rise by 8 percent in 2024, despite the temporary relaxation of occupancy cap.

Expect does not expect a rental increase despite a tighter HDB housing market, with a smaller number of flats that require a minimum occupancy period. Affordability remains the main concern for tenants.

HDB rent prices will stabilize in 2024 with a small gain of between 1 and 3 percent.

Analysts predict that HDB rental rates will start to decline in the first quarter 2024. HDB rentals cannot defy gravity as the rental rates of private residential property are expected to decrease in 2024.

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