BOTH condominium and HDB (Housing Board) rentals rose in August to achieve the 20th and 26th straight month of growth, respectively, although volumes continued to fall short on a year-on-year comparison.

According to flash data released by SRX Property and 99.co on Wednesday (Aug 14), August rental prices for condominiums rose 3.2 per cent from the previous month with the largest contribution coming from the core central region (CCR) at 3.7 per cent. This was followed by the rest of the central region (RCR) and outside central region (OCR) at 3.1 per cent and 3 per cent, respectively.

99 Group’s head of research Pow Ying Khuan noted that the monthly increases for CCR and RCR rents in August were the highest over the past year.

On a year-on-year basis, overall rents grew 27.5 per cent from August 2021 with prices in the CCR, RCR and OCR increasing by 27 per cent, 27.2 per cent and 28.2 per cent, respectively.

Volumes for the condo rental market rose marginally by 0.4 per cent month on month to an estimated 4,524 units from 4,506 units rented in July 2022. They however remained 6.3 per cent lower when compared to the previous year, and 8 per cent lower than the 5-year average volume for the month of August.

By region, 37.1 of total volumes were from the OCR, while 34.8 per cent came from the RCR and 28.2 per cent was from the CCR.

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Pow believes the discrepancy between month-on-month and year-on-year condo rentals and volumes across the 3 regions could be due to the recent relaxation of borders between Singapore and other countries, the resumption of work in offices, and more foreigners moving closer to the city as they shop for a more permanent home.

“This is in contrast to the previous year when work-from-home was common, and a major demand shifted towards suburban homes due to lower rental expenses,” observed 99 Group’s head of research.

As for the HDB rental market, prices increased by 2.4 per cent from the previous month, led by higher rents in mature estates (2.6 per cent) while prices in non-mature estates grew 2.3 per cent.

Four-room flats booked the highest month-on-month rental increases by 3.5 per cent, followed by executive flats (2.8 per cent), 3-roomers (2 per cent) and 5-roomers (1.9 per cent). Pow of 99 Group said the significantly higher demand for 4-room flats in August could be possibly due to more attractive rental pricing and higher availability compared to 5-roomers.

Year on year, overall rents increased by 21.6 per cent with mature and non-mature estate rents growing 21.3 per cent and 21.7 per cent, respectively. All room types recorded rent increases with 3-roomers by 21.5 per cent, 4 rooms by 20.8 per cent, 5-roomers by 22.9 per cent and executive rents by 19.7 per cent.

HDB rental volumes grew 3.8 per cent month on month to an estimated 1,765 units from 1,700 units rented in July 2022 – but fell 1.3 per cent when compared to the previous year. Volumes remained 3 per cent lower than the 5-year average volume for August.

By room type, a majority 38.3 per cent of August’s total volumes were from 4-room units, followed by 3-roomers at 35.3 per cent. Five-roomers and executive flats contributed 21.5 per cent and 4.9 per cent, respectively, to total HDB rental volumes.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, thinks overall condo and HDB rental prices may either continue rising or remain at current levels in the coming months as “the tight housing situation is not expected to be alleviated soon”.

“We do not expect rental demand to rebound too significantly due to some price resistance unless there is a significant ramp-up in foreign employment, which may push rental demand higher,” she said. 

Sun is anticipating the luxury segment to benefit from Singapore’s recent initiatives to attract top foreign talent in key sectors, which include issuing new work passes for high earners. She also foresees higher demand for large private homes, including landed properties, as foreign expats sponsoring their dependants could stay here for up to 5 years.

While ERA Realty’s head of research Nicholas Mak said such highly-paid foreigners will be “in the minority” and “may not move the needle much” in the overall rental index, he thinks their housing demand and rich accommodation budgets could nonetheless spur buying and leasing demand in the high-end housing market.

“For every one of these highly-paid foreigners arriving in Singapore, there could be a few dozen other foreigners who would seek more modest accommodation, such as HDB flats. Therefore, the signs are pointing to upwards pressure on rental rates in both the HDB and private housing markets in the short term,” he observed.