Condo, HDB rents continue climb in July, but growth slows: SRX, 99.co

Condo, HDB rents continue climb in July, but growth slows: SRX, 99.co

Aug 11, 2022

CONDOMINIUM and Housing Board (HDB) rental prices continued their ascent in July, but growth slowed compared to the month before.

Rental volumes also rose month on month for condos and HDB flats, but were lower on a year-on-year basis, and below the average 5-year volumes for July, according to flash figures released by SRX Property and 99.co on Thursday (Aug 11).

Rents for condos and HDB flats rose 1.7 and 1.5 per cent month on month respectively, compared with an increase of 2.1 and 2.3 per cent in June. Year on year, condo rents were up 23.5 per cent, while HDB rents rose 19.1 per cent.

A marked increase in the supply of condos and HDB flats in the second quarter of 2022 had helped moderate rents in the first half of the year, said Huttons Asia chief executive Mark Yip.

Condo rents in the outside of central region (OCR) registered the highest monthly gain at 2.2 per cent, followed by rents in the rest of central region (RCR) which rose 1.7 per cent and the core central region (CCR) which increased 1.2 per cent. Compared with the year-ago period, condo rents were up 26.3, 21.6 and 21.8 per cent respectively.

Both mature and non-mature estate rents rose in July, rising 2.5 and 0.4 per cent respectively on the month, and increasing 18.7 and 19.3 per cent on the year.

All room types experienced rental price increases. Three-room, 4-room, 5-room and executive rents respectively rose 2.3, 0.1, 2.5 and 1.9 per cent month on month and 19.7, 17.4, 20.9 and 15 per cent year on year.

Condo rental volumes rose for the third straight month, rising 5.3 per cent to 4,809 units as viewings picked up after the school holiday period in June. This indicates that more tenants are accepting the rental increases and proceeding to rent, noted property analysts.

“This could be because they are aware that housing stock is lacking in the market and demand will continue to grow,” said Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.

Foreigners and PRs (permanent residents) who have just returned from overseas would also have to accept the higher rental costs as they do not have other housing options, she added.

Year on year, condo rental volumes were down 2.9 per cent and 9.1 per cent lower than the 5-year average volume for the month of July.

“The yearly drop signals a tight supply in the condo rental market, as new homes have faced delays in their completion timeline due to disruptions caused by the pandemic,” said 99 Group head of research Pow Ying Khuan.

A bulk of the condo rental transactions (38.1 per cent) were from the OCR, followed by 35.7 per cent from the RCR and 26.2 per cent from the CCR.

Meanwhile, HDB rental volumes advanced 11.1 per cent to 1,762 HDB flats after dropping in June. Year on year, volumes were down 3.2 per cent and 8.7 per cent lower than the 5-year average volume for the month of July.

By room type, most of the rental transactions were for 4-room flats (37 per cent), followed by 3-room flats (35.1 per cent), 5-room flats (22.3 per cent) and executive flats (5.6 per cent).

Nicholas Mak, head of research and consultancy at ERA Realty, expects the presently tight labour market to attract more foreigners to work in Singapore, resulting in healthy residential leasing demand.

Furthermore, the private and HDB residential leasing market has been hit by the “perfect storm” of rising demand and stagnant supply, leading to strong upward pressure on rental rates.

“Unless there is a major change in the macroeconomic climate, the current situation in the Singapore residential leasing market could persist in the next 6 to 12 months,” he added.

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