Condo rents fall, HDB rents rise in May on lower leasing volumes: SRX, 99.co
RENTAL market demand for condominiums and Housing and Development Board (HDB) flats continues to be choppy, with volumes falling in May after rebounding the month before.
Flash estimates from SRX and 99.co released on Wednesday (Jun 28) showed that condo rents slid 0.6 per cent month on month. Rents for HDB flats, however, continued to rise, gaining 1.1 per cent from April.
“The subtle month-to-month percentage price swings in condo rents may be due to mismatched expectations among landlords and tenants after months of continuous hikes,” said 99.co’s chief data and analytics officer Luqman Hakim.
Deals could have also taken longer to close, with some tenants shifting downstream to the public housing sector for cheaper alternatives, noted Christine Sun, OrangeTee & Tie senior vice-president of research and analytics.
“The trends indicate that private rental growth could have peaked, and rental prices are now stabilising,” she said.
Rents for condominiums in all regions registered decreases, the data showed. The Core Central Region (CCR) experienced the largest decline at 1.7 per cent, followed by a 0.4 per cent drop in the Rest of Central Region (RCR) and a 0.2 per cent dip in the Outside Central Region (OCR).
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“One plausible reason for the drop in rents is the significant volume of condominiums attaining their temporary occupation permit in 2023,” said ERA Realty key executive officer Eugene Lim.
Year on year, condo rents were 26.8 per cent higher, with rents in the OCR, RCR and CCR rising 28.7 per cent, 28.4 per cent and 22.3 per cent, respectively.
Condo rental volumes fell 8.2 per cent on the month to 5,164 units rented, compared with the 5,623 units rented in April. Year on year, volumes were 1.8 per cent lower and 7.8 per cent lower than the five-year average volumes for the month of May.
Huttons chief executive Mark Yip said the weakness in condo rentals in May could be a one-off case, similar to what was observed in March.
“Interest rates are staying high at the moment, and owners need the rents to offset the high mortgage instalments,” Yip added.
By region, 36.8 per cent of transactions took place in the OCR, followed by 33.2 per cent in the RCR and 30.1 per cent in the CCR.
HDB volumes, meanwhile, declined by 10.2 per cent to 2,857 HDB flats rented in May, compared with the 3,183 units rented in the prior month. Year on year, volumes were up 9.8 per cent and were 3.2 per cent higher than the five-year average volumes for the month of May.
Four-room flats continued to be the most popular choice for renters, accounting for 37.3 per cent of total volumes, followed by 33.4 per cent for three-room flats, 23.3 per cent for five-room flats and 6 per cent for executive flats.
Overall, HDB rents were up 25.1 per cent year on year. Sun observed that prices continued to escalate as more renters competed for affordable rental units in the HDB segment.
“Some tenants have shifted from the private sector, and they may have the financial means to pay higher rents to secure units, thus pushing up the rental prices in certain locations or flat types,” Sun added.
SRX and 99.co noted that all room types recorded increases, rents for both five-room and executive flats rose 1.6 per cent, four-room flats experienced a gain of 1.3 per cent, while three-room flat rents increased slightly by 0.3 per cent. Compared to the same period a year ago, rents were up 27.7 per cent, 26.1 per cent, 25.6 per cent and 22.1 per cent, respectively.
Rents in mature estates rose by 1.2 per cent, while rents in non-mature estates rose by 0.9 per cent month on month. Year on year, rents were up 23.4 per cent and 26.7 per cent, respectively.
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