RENTAL volumes for condominiums and Housing and Development Board (HDB) flats fell in August after regaining some ground in July. 

Condo leasing volumes fell 7.6 per cent on the month to 6,730 units rented, compared with the 7,287 units leased in July, based on flash estimates from SRX and 99.co released on Wednesday (Sep 27).  

Rental volumes were 10.3 per cent lower compared with the year-ago period, and 11.6 per cent lower than the five-year average volume for the month of August.

“August is the month when it is natural to see a drop in rental volume in the condo market following its volume year-high that usually occurs in July,” said 99.co chief data and analytics officer Luqman Hakim.

More newly completed condos had also entered the market during the month, intensifying the competition for tenants, observed Huttons Asia chief executive Mark Yip.

He added: “Against a backdrop of slowing employment growth and more tenants relocating overseas to work remotely, condo rents came under pressure in August 2023.”

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The data showed that 36.2 per cent of total rental volumes were from the Outside Central Region (OCR), followed by 33.6 per cent in the Rest of Central Region (RCR) and 30.2 per cent from the Core Central Region (CCR).

Condo rents, meanwhile, were down 1 per cent from the previous month – reverting to the mean established for the past six months, indicating a rental ceiling may have been reached for the condo market, Hakim said.

Christine Sun, OrangeTee & Tie senior vice-president of research and analytics, observed that the condo rental market is showing more signs of stabilisation as rents continue to “trend sideways” for the sixth consecutive month.

The fall in condo rents was apparent across all regions. Rents in the CCR dropped by 1.7 per cent from the month before, while the RCR slipped by 0.7 per cent and OCR decreased by 0.5 per cent.

Year on year, overall condo rents were 17.3 per cent higher. The OCR registered the highest gain at 20.1 per cent, RCR rose 17.4 per cent, and CCR increased 13.9 per cent.

As for the HDB flat market, rents inched up 0.1 per cent on the month – the lowest increase recorded in two years. Similarly, property analysts said this could be an early sign of a slowdown or stabilisation in the HDB rental market. 

“It might suggest that we are on the cusp of a possible rental price cooling,” Hakim noted.

Year on year, HDB rents were up 20.8 per cent. HDB leasing volumes fell 10.1 per cent on the month to 2,997 HDB flats rented, compared with the 3,334 units leased in July.

Rental volumes were up 16.9 per cent against the year-ago period, and 11 per cent higher than the five-year average volume for the month of August.

Four-room flats accounted for 37.7 per cent of total volumes, three-room flats accounted for 32.3 per cent, five-room flats 24.1 per cent and executive flats 5.9 per cent.

In terms of rents, both mature and non-mature estate rents recorded increases of 0.1 per cent each from the month before and were up 19.9 per cent and 21.9 per cent, respectively, on the year.

Three-room and five-room flat rents saw price increases of 0.7 per cent and 0.5 per cent, respectively, while four-room and executive flat rents fell by 0.3 per cent and 1.5 per cent, respectively.

All room types recorded price increases year on year. Larger flats had the highest price gains. Executive and five-room flat rents were up 23.4 per cent and 22.6 per cent, respectively, followed by four-room flats at 21 per cent and three-room flats at 18.6 per cent.

ERA key executive officer Eugene Lim said the completion of Build-To-Order units could help alleviate the demand for rental units as more renters collect the keys for their new homes.

“As HDB rental demand starts to ease, this could put downward pressure on HDB rental prices,” he added.

In contrast, Sun said there will “always be demand” for HDB flats as they offer the most affordable rents, so its rental market could still outperform the private market for a while longer.