New Reporter
03-05-23, 12:04
Residential rent pressure expected to ease in 2023, sharp rise last year ‘exceptional’: MAS report
Apr 26, 2023
RENTAL pressure in both private and public housing markets is expected to ease this year after rents rose sharply from 2021 on an exceptional supply-demand imbalance.
Extremely tight supply conditions resulted from pandemic-induced delays to completions of housing projects. Rental demand in 2021 and 2022 was strong as residents sought temporary accommodation and non-resident demand recovered after Covid-19 border restrictions were eased in 2022, a Monetary Authority of Singapore (MAS) report indicated on Wednesday (Apr 26).
MAS’ macroeconomic review featured an assessment of such developments in the Singapore economy, with a section contributed by the Ministry of National Development on how Housing and Development Board (HDB) and private residential rents have increased since 2021.
The MAS report noted that tightness in supply is expected to ease this year with significant housing supply coming on stream. Accordingly, further residential rent increases should ease in the coming quarters.
In 2021, private rental demand from Singaporeans and permanent residents (PRs) increased by about 7,000 units, compared to the average annual increase of about 1,300 units in 2018 and 2019.
Among non-residents, private rental demand in 2021 fell by about 4,200 units.
With the easing of border restrictions in 2022, the trend reversed, as non-resident demand rebounded to an increase of 2,300 units, while for Singaporeans and PRs the increase fell to about 700 units.
Data from SRX and the Urban Redevelopment Authority showed that HDB residential rents rose by 38 per cent since 2021, while private residential rents were up 43 per cent within the same period.
In 2022, private property rental prices rose by 29.7 per cent and HDB rents increased by 27.6 per cent.
Between 2020 and 2022, there was an average of 20,000 private and public residential units completed, 22 per cent lower than before the pandemic – when 26,000 units were completed on an average annual basis between 2018 and 2019.
“Such market imbalances have already started to ease and will continue to do so progressively through this year,” the MAS report noted.
Last year, the Outside Central Region had the largest yearly increase in rents of 31.8 per cent, followed by the Rest of Central Region and Core Central Region. For the whole of 2022, rentals of landed properties increased by 28.1 per cent.
In 2022, rents increased for all types of public housing, with the largest increase among executive units – up 31 per cent.
About 32,000 public and private residential units will be completed per year on average between 2023 and 2025.
In the private residential market, 8,000 private residential units were completed in the last two quarters, double the average completions of about 2,000 units per quarter in 2021 and 2022.
HDB is also on track to complete another 20,000 flats in 2023 – close to triple the 7,000 flats completed in 2020, during the pandemic.
As significant housing supply comes on stream, Singaporeans and PRs are likely to vacate their rental units to take up occupation of their completed owned units.
https://www.businesstimes.com.sg/property/residential-rent-pressure-expected-ease-2023-sharp-rise-last-year-exceptional-mas-report
Apr 26, 2023
RENTAL pressure in both private and public housing markets is expected to ease this year after rents rose sharply from 2021 on an exceptional supply-demand imbalance.
Extremely tight supply conditions resulted from pandemic-induced delays to completions of housing projects. Rental demand in 2021 and 2022 was strong as residents sought temporary accommodation and non-resident demand recovered after Covid-19 border restrictions were eased in 2022, a Monetary Authority of Singapore (MAS) report indicated on Wednesday (Apr 26).
MAS’ macroeconomic review featured an assessment of such developments in the Singapore economy, with a section contributed by the Ministry of National Development on how Housing and Development Board (HDB) and private residential rents have increased since 2021.
The MAS report noted that tightness in supply is expected to ease this year with significant housing supply coming on stream. Accordingly, further residential rent increases should ease in the coming quarters.
In 2021, private rental demand from Singaporeans and permanent residents (PRs) increased by about 7,000 units, compared to the average annual increase of about 1,300 units in 2018 and 2019.
Among non-residents, private rental demand in 2021 fell by about 4,200 units.
With the easing of border restrictions in 2022, the trend reversed, as non-resident demand rebounded to an increase of 2,300 units, while for Singaporeans and PRs the increase fell to about 700 units.
Data from SRX and the Urban Redevelopment Authority showed that HDB residential rents rose by 38 per cent since 2021, while private residential rents were up 43 per cent within the same period.
In 2022, private property rental prices rose by 29.7 per cent and HDB rents increased by 27.6 per cent.
Between 2020 and 2022, there was an average of 20,000 private and public residential units completed, 22 per cent lower than before the pandemic – when 26,000 units were completed on an average annual basis between 2018 and 2019.
“Such market imbalances have already started to ease and will continue to do so progressively through this year,” the MAS report noted.
Last year, the Outside Central Region had the largest yearly increase in rents of 31.8 per cent, followed by the Rest of Central Region and Core Central Region. For the whole of 2022, rentals of landed properties increased by 28.1 per cent.
In 2022, rents increased for all types of public housing, with the largest increase among executive units – up 31 per cent.
About 32,000 public and private residential units will be completed per year on average between 2023 and 2025.
In the private residential market, 8,000 private residential units were completed in the last two quarters, double the average completions of about 2,000 units per quarter in 2021 and 2022.
HDB is also on track to complete another 20,000 flats in 2023 – close to triple the 7,000 flats completed in 2020, during the pandemic.
As significant housing supply comes on stream, Singaporeans and PRs are likely to vacate their rental units to take up occupation of their completed owned units.
https://www.businesstimes.com.sg/property/residential-rent-pressure-expected-ease-2023-sharp-rise-last-year-exceptional-mas-report