Condo, HDB rental volumes rebound in December, rents continue climb: SRX, 99.co

Jan 31, 2023

RESIDENTIAL leasing volumes rebounded in December, owing to lease renewals from expats and tenants anticipating higher rents in 2023.

The bounceback was more pronounced in the condominium segment, which saw volumes climbing 26.6 per cent, breaking four straight months of decline, according to flash estimates from SRX and 99.co on Tuesday (Jan 31).

The number of condo units rented in December stood at 6,345 units, compared with 5,013 units the month before. Year on year, condo rental volumes were 13.4 per cent lower, but 2.8 per cent higher than the five-year average volume for the month of December.

By region, the highest number of condo units rented (38.2 per cent) came from the Outside Central Region (OCR), followed by the Rest of Central Region (RCR) at 33.5 per cent and the Core Central Region (CCR), which contributed 28.3 per cent.

Rents in December were up 3 per cent from the previous month and 34.4 per cent higher from the year before. All regions saw price increases, with the CCR in the lead with a gain of 3.9 per cent on the month, followed by the OCR and RCR which rose 2.6 per cent and 2.1 per cent respectively.

Huttons chief executive Mark Yip noted that quite a number of projects obtained their TOP (temporary occupation permit) in the last quarter of 2022 and were put up for rent in December.

“Being newly completed, these projects were able to achieve higher rents than the older projects. This pushed up rents of condos in December,” he added.

Year on year, rents in the OCR, RCR and CCR were up 35.4 per cent, 33.8 per cent and 32.1 per cent respectively, SRX and 99.co said.

When it comes to the HDB rental market, rents rose 2.8 per cent month on month and 28.4 per cent year on year.

Both mature and non-mature estate rents advanced 2.2 per cent and 3.4 per cent respectively from November 2022 and were up 25.7 per cent and 31.2 per cent respectively on the year.

When it comes to flat type, three-room, four-room and five-room HDB rents increased by 1.5 per cent, 3.5 per cent and 4.3 per cent respectively. Executive flat rents, however, were down 0.6 per cent month on month. Year on year, three-room, four-room and five-room and executive HDB rents were up 24.6 per cent, 29.5 per cent, 31.6 per cent and 27.8 per cent respectively.

HDB leasing volumes in December climbed 5 per cent from the month before, with 2.513 HDB flats rented out, compared with 2,394 units in November. However, rental volumes were down 21.3 per cent year on year and 15.4 per cent lower than the five-year average volume for the month of December.

Most of the rental volumes were for four-room flats (38 per cent), followed by three-room (31.3 per cent), five-room (24 per cent) and executive (6.7 per cent) flats.

SRX and 99.co estimate 2022’s total condo rental volumes to be 74,637 units, which is 10.2 per cent lower than 2021. Total HDB rental volumes, meanwhile, stood at 32,776, 1.8 per cent higher than the year before.

Looking ahead, property analysts are projecting rents to rise at a rate of between 10-19 per cent, albeit at a slower pace due to a rise in housing supply.

ERA Realty’s head of research Nicholas Mak projects an 83 per cent year on year increase in private residential units to 17,400 units in 2023, excluding executive condos. Some of these units will be offered for leasing by owners, in turn easing the tight supply in the private residential leasing market and moderating the pace of growth in rental rates.

Other drivers of rental demand include the return of foreigners to Singapore for work, especially the mainland Chinese now that China has reopened its borders. This will push rents upwards, said Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

In contrast, Hutton’s Yip expects the slower economic conditions in 2023 to slow down hiring in some sectors of the economy, reducing rental demand.

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