Record S$8,000-a-month rent for 3-room HDB flat in Bukit Merah raises eyebrows

A THREE-ROOM Housing and Development Board (HDB) flat in Taman Ho Swee in Bukit Merah was leased for S$8,000 a month in August – setting a record for the priciest rent for a public housing flat. 

This is according to HDB’s database of market rental rates; these rates are based on flat owners’ declarations in their rental applications, the agency said on its website.

The outlier deal – almost treble the median rent for three-room flats in the area – contrasts with the wider public housing rental market, which has shown signs of “general weakness” recently in terms of volumes and demand, said Christine Sun, chief researcher and strategist at OrangeTee Group.

Caveats data showed that units in the Taman Ho Swee HDB block are 54 square metres in size and have 45 years left on the lease. 

Sun said the tenant may have forked out more in rent for the unit as it is within walking distance of Havelock MRT station and Great World shopping mall in the River Valley area. 

That is a highly desirable location, just a stone’s throw from Singapore’s premier Orchard Road shopping belt and the Central Business District, she said. 

The Business Times understands that the flat is not an adjoined three-room unit. Under HDB’s conversion scheme, married couples and/or families can purchase two adjoining flats and physically convert them into a single jumbo flat. This will also depend on the agency’s assessment of the flats. 

HDB resale prices have enjoyed a strong uptick. Its latest data indicates that resale prices grew 2.3 per cent in the second quarter, accelerating from a 1.8 per cent rise in the first quarter. Year on year, prices were up 6.6 per cent. 

Meanwhile, transaction volumes rose by 4 per cent in Q2. This was a 12.9 per cent increase on the year. 

HDB rents have also outpaced that of the private market in recent months.  

Based on statistics from URA Realis, median rents for non-landed private homes, excluding executive condominiums, rose 1.2 per cent between January and August. 

Comparatively, based on SRX’s rental index, public housing rents rose 3.1 per cent in the same period. 

An outlier 

Still, Sun emphasised that high rents for HDB flats – particularly the S$8,000 a month witnessed in Bukit Merah – are an anomaly. 

According to HDB figures, median rents in Bukit Merah were S$2,970 a month for three-room flats, S$3,800 for four-room flats, and S$4,000 for five-room flats in the second quarter of this year.

In July, a three-room flat in the same block in Taman Ho Swee was leased for S$3,300 a month. Another two three-room flats were leased for S$2,200 and S$3,000 a month in other blocks in the same estate.  

Most recently in September, four three-room flats in the Taman Ho Swee estate were leased for S$2,300 to S$2,800 a month.

Sun also noted that the median rent for all flat types in Bukit Merah was S$3,400 a month in August. This figure was S$3,100 for the whole of Singapore. 

But even if the rented unit were a larger adjoined one, it would not justify the S$8,000 price tag, she said. A typical five-room unit in Bukit Merah, for instance, was leased for S$4,150 a month in August. 

In general, Sun said the number of tenants paying high rental prices for HDB flats fell in 2024. 

Some 678 units were leased for a monthly rent of at least S$4,500 in the first eight months of this year, down from 823 units in the same period last year. 

There was also a drop in units leased for at least S$5,000 a month, from 228 to 152 over the same period, she said. 

Among HDB flats that fetch S$5,000 or more in monthly rent are four-room and five-room units in Cantonment Road, Dawson Road, Ghim Moh Link, Holland Close, Jalan Tenteram and Strathmore Avenue.

Likewise, 10 flats were leased for S$6,000 or more a month in the first eight months of this year, down from 21 in 2023.

These “high-priced” units account for a minute proportion of all rental transactions, Sun added. 

For instance, the 152 units leased for at least S$5,000 a month accounted for 0.6 per cent of all transactions between January and August. The 10 units leased for at least S$6,000 a month made up just 0.04 per cent of all transactions over the same period. 

“This aligns with the general weakness the HDB rental market has witnessed recently,” said Sun. “Due to the softer private rental prices, especially in the suburbs, some tenants, especially locals leasing larger flats, may have moved into the private market… attracted to the competitive rates landlords offer.”

Mark Yip, Huttons Asia;s chief executive officer, added that demand in the HDB rental market also appears to have tapered off due to business closures in the retail and food and beverage industries.

According to flash estimates released by SRX and 99.co last week, public housing rental volumes fell from 2,993 units to 2,626 units.

The number of flats reaching their minimum occupation period has also fallen in the past two years, leading to a decline in available rental units, said Sun. 

She expects leasing volumes to therefore fall to between 36,500 and 38,000 units this year, from 39,138 units last year. 

Rents may consequently rise by 2 to 3 per cent this year, significantly slower than the 10.2 per cent growth seen in 2023, she added.