THE condominium rental market booked its third consecutive month of declines in October, while prices for Housing and Development Board (HDB) rents fell for the first time since October 2021.

Based on flash estimates from SRX and 99.co, rents in the condo rental market were down by 0.2 per cent in October 2023 from a month prior. This was led by a 0.9 per cent fall in the Outside Central Region (OCR) and a 0.3 per cent decline in the Core Central Region (CCR).

Volumes for condo rentals were down as well on a month-on-month basis, with an estimated 5,402 rented units marking a 5.4 per cent decline from 5,713 units in September 2023.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, attributed the stagnation of private rental prices to a significant increase in housing supply, as more condominiums were completed over the past year.

Sun expects the declining trend in condo rental volumes to persist over the next two months due to the year-end holidays.

She also cautioned of a further slowdown in the private rental market in 2024 as domestic demand continues to contract, with an anticipated injection of housing supply to potentially add downward pressure on rental prices.

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Within the private market, Sun expects price growth to moderate to around 2 per cent to 5 per cent next year, down from 29.7 per cent in 2022, and 12 per cent to 14 per cent in 2023.

Year on year, condo rental prices were up 10.8 per cent from October 2022 levels as rents across the OCR grew 12.2 per cent, and by 12.1 per cent in the Rest of Central Region (RCR). Rentals in the CCR expanded 8.2 per cent.

Rental volumes increased a marginal 0.6 per cent on the year, though remaining 11.4 per cent lower than the five-year average volume for the month of October.

Breaking it down by region, 34.8 per cent of total volumes came from the OCR, while RCR volumes followed closely behind at 34.3 per cent. The remaining 30.9 per cent of volumes were from the CCR.

In the HDB rental market, prices declined by 0.4 per cent from September 2023 levels. 

Mark Yip, chief executive of Huttons, said this could be due to a lack of lease renewals as more tenants moved to new homes amid the completion of more new condos and HDB flats.

“The increase in (the) supply of flats for rent gave tenants more options to pressure landlords on rents,” he added.

The month-on-month decline was mainly due to rents in mature estates falling by 0.1 per cent. This was offset in part by an increase in non-mature estate rents of the same percentage.

Based on room types, rents for three-roomers fell by 0.6 per cent from September 2023 levels, while five-roomer rents declined a steeper 1.4 per cent. Rental prices for four-room units increased by 0.1 per cent, while rents for executive flats expanded by 0.9 per cent.

Overall HDB rental volumes nonetheless expanded on a month-on-month basis by 2.4 per cent, with some 2,830 units rented out compared with 2,763 units in September 2023. On a year-on-year comparison, volumes for the month were up 14.9 per cent.

October’s HDB rental volumes also represented a 1.7 per cent increase from the five-year average volume for the month.

This comes as HDB flats remain “the most affordable choice” for budget-conscious tenants, as well as those downgrading from private properties as they serve their 15-month wait-out period before being eligible to purchase a resale flat, said ERA Singapore’s key executive officer Eugene Lim.

He also noted that “more tenants have turned prudent with their rental budget” given a higher unemployment rate and slower anticipated salary increment.

By room type, the majority or 37.7 per cent of total HDB rental volumes came from four-room flats. This was followed by three-roomers (31.9 per cent), five-room units (24.5 per cent) and executive units at 5.9 per cent.

Luqman Hakim, 99.co chief data and analytics officer, said: “On the ground, we are increasingly hearing of Malaysians – a group that substantially make up Singapore’s total workforce and typically rents – using the favourable Singapore dollar-to-Malaysian ringgit exchange rate to look for accommodation in Johor instead of being subjected to substantial increases in the cost of living in Singapore.

“These comments come from both blue-collar workers and professionals.”

Property veteran Nicholas Mak said that October 2023’s data marked the “start of a big chill” in the housing rental market.

The chief research officer of online portal Mogul.sg said he expects a supply influx of housing units from soon-to-be-completed projects and HDB flats reaching the end of their Minimum Occupation Period (MOP) to further dampen rental rates in 2024.

He projects a 10 per cent to 15 per cent fall in residential rental rates by the end of the year.

“Although the HDB rental rates appear to be holding up presently, the new supply of MOP flats and the falling private rental rates will exert downward pressure on the rental rates of HDB flats, which will lead to HDB rental rates falling next year.”