Residential property rents, volumes up in September amid ‘landlord’s market’

RENTAL prices for both condominium and Housing and Development Board's (HDB) properties grew by more than 3 per cent each over the month of September, while volumes rose in tandem.

According to flash estimates by SRX Property and 99.co released on Wednesday (Oct 12), condo rentals rose for the 21st consecutive month by 3.3 per cent from August 2022, with the Rest of Central Region (RCR) registering the highest increase of 3.9 per cent.

Condo rents in the Core Central Region (CCR) and Outside Central Region (OCR) increased by 2.6 per cent and 3.3 per cent, respectively.

On a year-on-year basis, condo rental prices were up 30.9 per cent overall with rents in the RCR, OCR and CCR increasing by 31.8 per cent, 31.3 per cent and 29.3 per cent respectively.

An estimated 4,760 condo units were rented out over September compared to 4,334 units the previous month, representing a 9.8 per cent increase. This was 1.9 per cent higher when compared with September 2021, and up 5.6 per cent from the five-year average volume for the month of September.

Breaking it down by region, 38 per cent of total volumes came from the OCR, with 35.3 per cent from the RCR and 26.7 per cent from the CCR.

Noting a strong condo rental market thus far, 99 Group's head of research Pow Ying Khuan believes the current tight supply situation will progressively improve once more new homes are completed next year.

"In the HDB rental market, however, even with more than 31,000 units estimated to reach their five-year MOP (minimum occupation period) by the end of this year and another 16,000 units or so in 2023, these HDB owners and would-be subsequent buyers might choose to stay put for the time before deciding on their next step, which could exacerbate the supply crunch in the HDB rental market, until demand reaches its peak," he said.

HDB rentals grew 3.2 per cent in September from the previous month, driven by price increases across both mature and non-mature estates by 3.3 per cent and 3.1 per cent, respectively.

Five-room flats saw the highest hike in rental prices at 4.8 per cent, followed by three-room units (4.4 per cent), executive flats (3.3 per cent) and four-room rents (1.2 per cent).

Overall HDB rents grew by 24.7 per cent on year, with mature and non-mature estates increasing by 24 per cent and 25.5 per cent respectively.

All room types recorded year-on-year rent increases as well. This was led once again by price increases for five-room flats (27.9 per cent), followed by three-roomers (25.3 per cent), executive flats (23.3 per cent) and lastly four-roomers (22.5 per cent).

HDB rental volumes were up marginally by 0.3 per cent on month at an estimated 1,809 units rented out compared to 1,803 the previous month. On year, volumes grew 5.1 per cent but are 0.9 per cent higher than the five-year average volume for the month of September.

By room type, 39.9 per cent of total volumes came from four-room HDB rentals and 32 per cent from three-roomers. 23.4 per cent of total volumes constituted 5-room rental transactions, and 4.8 per cent from executive flats.

Looking ahead, 99 Group's Pow foresees the possibility of both the condo and HDB rental markets being propelled further by increased demand coming from affected private property owners (PPO), or ex-PPOs who have to serve the 15-month wait-out period before they can purchase a resale flat.

"House hunters who decide to reassess their options could also choose to rent a unit in the meantime," he added.

Despite the rising rental prices, volumes for both the HDB and condo markets remain strong as "it is still a landlord's market now", said Christine Sun, Orange Tee & Tie's senior vice-president of research and analytics.

"Due to the strong rental demand, many landlords are only keen to sign contracts of at least two-year lease terms now. With few housing options available, many tenants have acceded to paying the higher asking rents. Even older properties and less accessible homes are in demand and able to fetch quite attractive rent," she observed.

Sun is anticipating a further rise in rental prices going forward, in view of impending goods and services tax (GST) and higher property taxes in 2023.

Huttons Asia's chief executive Mark Yip also believes this "landlord's market" is likely to continue throughout the year. He estimates rents to increase by up to 10 per cent for the fourth quarter of 2022.

"The strong run-up in rents is likely to be given another lift in 2023 in the wake of cooling measures," said Yip. 

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