Condo leasing market continues decline in February, HDB rents hit new all-time high: SRX, 99.co

SINGAPORE’S private rental market remained soft in February 2024, while Housing and Development Board (HDB) housing rents rose to reach a new all-time high after dipping the month before.

Based on flash estimates released by SRX and 99.co on Tuesday (Mar 19), condominium rental prices fell 1 per cent from January to mark net negative growth for the 13th consecutive month. 

Chief data and analytics officer of 99.co Luqman Hakim noted that condo rents had hit their lowest point since January 2023, and attributed this “downward spiral” to a supply glut that has been in place since last year.

Christine Sun, chief researcher and strategist at OrangeTee Group, said: “Many condominiums reached temporary occupation permit last year, resulting in more new homes being put up for rental. The increased competition may have driven down rent prices in certain locations.

“As private rents continue to adjust, some tenants may switch from renting HDB flats to private homes in the coming months.”

On a month-on-month basis by region, Core Central Region (CCR) rents fell by 1.6 per cent in February 2024; rents in the Rest of the Central Region (RCR) fell 0.5 per cent, and the Outside Central Region (OCR) booked a 0.6 per cent decline.

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Year on year, overall rents fell by 4 per cent; rents in the CCR down 5.7 per cent, RCR rents declined 3.9 per cent, and OCR rents dipped 2.1 per cent.

Rental volumes for condos were lower as well, falling 21 per cent from the previous month and 7.7 per cent year on year to an estimated 4,715 units in February.

This was 11.9 per cent lower than the five-year average volume for the month.

By region, 35.8 per cent of total private rentals were from the OCR; 32.8 per cent were from the RCR, and 31.4 per cent were from the CCR.

ERA Singapore’s key executive officer Eugene Lim noted that the condo rental market is “facing challenges” amid rising retrenchment numbers and an increase of available homes for lease.

“Tenants are seeing more rental options in the market, and some landlords are more willing to discuss rental terms unlike a year ago,” he said.

On the other hand, rents of HDB flats grew 1 per cent in February from the previous month, to a new all-time high – though volumes fell 19.1 per cent to 2,448 flats rented, from 3,027 units in January.

Hakim of 99.co said rising HDB housing rents were due to strong demand from renters seeking “relief from inflation” as rents for condominium units were “still considered too expensive”.

Considering how the decline in volumes for condo and HDB housing rentals were mainly due to the Chinese New Year festivities in February, he expects volumes for both markets to pick up in the second quarter of 2024.

Month on month, rents of HDB flats in mature estates grew 1.3 per cent, while non-mature estate rents inched up 0.5 per cent.

All room types recorded month-on-month rent increases, led by executive units (2.6 per cent) and four-roomers (1.5 per cent). Rents for three-room HDB units were up by 0.4 per cent, and five-roomers booked a 0.3 per cent increase.

Overall HDB housing rental prices were up 8.4 per cent on the year, with mature estate rents increasing 7.2 per cent and non-mature estate rents growing 9.5 per cent.

On a year-on-year basis, all room types recorded rent increases, with executive rents rising by 9 per cent, four-room rents up by 8.5 per cent, and five-roomer rents increasing 8.1 per cent. Rents for three-room units grew 7.8 per cent.

February’s rental volume figures represent an 8.4 per cent decline year on year, and are 6.9 per cent lower than the five-year average volume for the month.

By room type, 37.3 per cent of total volumes came from four-room HDB flats, and another 31.7 per cent from three-roomers. Five-room unit rentals contributed to 25.4 per cent of the month’s volumes, and 5.7 per cent were from executive units.

Huttons chief executive Mark Yip said February’s lower rental volumes could be due to more tenants moving to large HDB flat types as a result of policy changes, which may have in turn pushed up rents for larger executive flats.

While Yip foresees condo rents to bottom out in the first half of 2024 and stabilise in the second half, he believes rents of HDB housing could increase by up to 8 per cent for the year, as tenants seek more affordable housing options amid a lower supply of flats reaching the minimum occupation period (MOP).

Likewise, Sun of OrangeTee said she believes the limited supply of new MOP flats may “prop up HDB rentals for a while, unless private rents dip drastically and pose competition to the HDB market”.