Condo rental prices, volumes rebound in April; HDB market continues to climb: SRX, 99.co

May 31, 2023

CONDOMINIUM rental prices and volumes rebounded in April after a dip in March, while the rental market for Housing and Development Board (HDB) flats continued to strengthen for the second straight month.

Flash estimates from SRX and 99.co released on Wednesday (May 31) showed that condo rents were up 1 per cent in April, with most regions except the Core Central Region (CCR) registering rent increases.

Rents fell in the CCR by 0.2 per cent, but rose 1.7 per cent in the Rest of Central Region (RCR) and 1.6 per cent in the Outside Central Region (OCR). Year on year, condo rents were up 29.9 per cent, with the CCR, RCR and OCR rising 27 per cent, 30.8 per cent and 32 per cent, respectively.

“Escalating rents in prime areas could have compelled some tenants to relocate to similar-sized units in the city fringe,” said ERA’s key executive officer Eugene Lim.

He noted that a four-bedroom unit in Ardmore Residence in the CCR commanded a monthly rent of S$38,000, compared with S$14,000 for a similar-sized unit in Caribbean at Keppel Bay in the RCR.

In the HDB rental market, overall rents continued to climb in April, rising 0.8 per cent from the month before and 26.1 per cent on the year.

Rents in both mature and non-mature estates increased by 0.1 per cent and 1.2 per cent, respectively, from the month prior, and rose 24.8 per cent and 27.4 per cent, respectively, on the year.

All room types recorded growth in rents. Rents for five-room flats increased the most at 1 per cent, followed by four-room flats at 0.9 per cent, three-room flats at 0.4 per cent and executive flats at 0.1 per cent.

Nicholas Mak, chief research officer at Mogul.sg, said he believes rental rates could peak this year.

He noted that HDB rents, on average, have risen less than 1 per cent per month from December 2022 to April 2023. This is significantly slower than the previous average monthly growth rate of 2.7 per cent between April and December 2022.

The same can be said for condo rents, which rose only 0.6 per cent on average from February to April 2023, slower than the 2.9 per cent rate of increase between April 2022 and February 2023.

Data from SRX and 99.co also showed condo leasing volumes recovering month on month with 5,598 units rented in April, 13.8 per cent higher than the 4,920 units rented in March.

However, rental volumes were 5.2 per cent lower year on year, and 13.3 per cent lower than the five-year average volumes for the month of April.

By region, the OCR registered the most units leased at 35.3 per cent, followed closely by the RCR at 33.9 per cent and the CCR at 30.8 per cent.

Rental volumes continued to rise, albeit at a slower pace than in March. The number of flats leased rose to around 3,183 flats in April, up 5.8 per cent from the 3,009 units rented in March.

Year on year, HDB rental volumes were 4 per cent higher, but 4.7 per cent lower than the five-year average volume for the month of April.

By room type, four-room flats were the most popular, making up 35.2 per cent of total HDB leasing volumes, followed closely by three-room flats at 33.8 per cent and five-room flats at 25.2 per cent. Executive flats made up 5.8 per cent of total rental volumes.

Huttons chief executive Mark Yip expects the increase in Additional Buyer’s Stamp Duty for foreigners and homebuyers who are not first-timers to boost the rental market in the second half of 2023.

“More foreigners are expected to rent in the interim while they await the outcome of their PR (permanent resident) application,” Yip said. He also noted that HDB upgraders buying an uncompleted home are likely to sell their flat and rent either a private apartment or HDB flat.

Condo rents may rise between 10 per cent and 15 per cent in 2023, moderating from the 29.7 per cent increase recorded in 2022, Yip noted. He also estimates that HDB rents will increase by about 10 per cent in 2023.

That being said, further completions of condos and flats reaching their five-year minimum occupation period in 2023 could increase the supply.

Furthermore, as more private housing units reach completion in 2023 (17,400 units) and 2024 (10,500 units), Mogul.sg’s Mak believes the condo rental index could weaken.

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