Rents for condos fell again in October; gap widen

HDB rents in October were up 1.7% compared with the 5-year average.

According to SRX & 99.co’s latest estimates, condo rentals were down 0.2 % in October of 2023 compared with the previous month. This was mainly due to a drop of 0.9% in the Outside Central Region and a decrease of 0.3% in the Core Central Region.

Monthly condo rental volume was down, too. Estimated 5,402 units were rented, a drop of 5.4% from the 5,713 units rented in Sept. 2023.

The rental market for condominiums recorded its third consecutive decline in October. However, prices for Housing and Development Board rents have fallen for the first since October 2021.

Rental volume rose by only 0.6 percent compared to last year. It is still 11.4 percent below the average monthly rental volume over the past five years for the month.

Due to a rising unemployment rate and a lower anticipated salary increment, more tenants are being prudent in their rental budget.

A majority, 37.7 percent of the total HDB rents are for four-room flats. It was followed by the three-roomers (31.9%), five-roomers (24.5%), and executive units with 5.9%.

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This may be because of the lack of renewals of leases. More tenants have moved into new homes since more HDB flats or condos were completed.

Rents could be increased due to an increase in the number of flats available for rent.

The main reason for the decline month-over-month was the fall in rents at mature estates of 0.1%. This was partly offset by an increase of the same percent in non-mature property rents.

Rents have declined by a greater amount, namely 1.4 per cent, for five-roomers compared to September 2023. Rental prices of four-room flats increased by just 0.1 percent, while executive flats saw a 0.9 percent increase.

HDB overall rental volumes grew by 2.4 percent on a monthly comparison, with about 2,830 rentals compared to the 2,763 units rented in September 2023. Comparing the volume of rentals for September 2023 to those from the previous year, it was up 14.9%.

The OCR volume accounted for 34,3% of the total, followed by RCR volumes at 34,3%. The CCR is responsible for the remaining volumes, which total 30.9 percent.

On the HDB market, rents have decreased by 0.4 percentage points from September 2023.

HDB apartments remain the most affordable option for budget-conscious renters, as well those tenants who are downgrading to a private property during their waiting period of 15 months before being eligible to buy a second-hand flat.

Although HDB rents appear to be stable, new supply of MOPs and falling private rental prices will have a downward impact on HDB rents.

Property Watch attributed the stagnation private rental prices due to a significant rise in housing supply over the course of the past year, with more condominiums being completed.

Due to the holiday season, many expect that the decline in condominium rental volumes will continue over the next couple of months.

Experts warn of further contraction of the private rental sector in 2024. As domestic demand continues its downward trend, an expected increase in housing stock could potentially push rental prices down.

In the private sector, most people expect that prices will grow between 2% and 5% next year. They are down from 29,7% in 2022. And they expect 12-14% in 2023.

Rents in OCR rose 12.2% and in RCR by 12.1 %. CCR rentals increased 8.2 percent.