Condo and HDB rents continue to climb, both rising over 1% in February

CONSTRUCTION delays resulting from restrictions to curb the spread of the Covid-19 pandemic have continued to push rents higher in both condominiums and Housing and Development Board (HDB) flats.

Condominium rents rose for 14 straight months, going up 1.4 per cent in February compared to the previous month, while rents for HDB flats also continued the uptrend for 20 consecutive months, increasing by 1.7 per cent over the same period, according to flash estimates by SRX and 99.co released on Wednesday (Mar 16).

On a year-on-year basis, overall rents for condominiums have gone up 11.8 per cent, while HDB rents rose 12.4 per cent.

Among condominiums, rents for those located in the rest of central region (RCR) saw the highest monthly increase of 2.2 per cent. Those in the core central region (CCR) went up 1.8 per cent, while units in the outside central region (OCR) rose 0.4 per cent.

The same trend can be seen when comparing the rise on an annual basis, with rents for condominiums in the RCR region registering the highest increase of 12.4 per cent. Rents in the CCR went up 10.6 per cent, while those in the OCR rose 12.2 per cent, when compared to February last year.

The rental market of condominiums in February 2022 is 3.7 per cent lower from the peak in January 2013.

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As for HDB flats, those in the non-mature estates saw a monthly increase of 2.4 per cent, while rents in mature estates went up by 1.1 per cent.

Among the different types of HDB flats, 5-room flats saw the highest increase of 2.3 per cent compared to the previous month. Rents for 3-room flats went up 1.6 per cent, while those of 4-room flats rose 1.8 per cent.

Compared with February last year, HDB flats in mature estates saw an 11 per cent increase in rent, while those in non-mature estates rose by 13.8 per cent.

All HDB flat types recorded rent increases over the year: 10.6 per cent for 3-room flats, 13.5 per cent for 4-room flats and 13.1 per cent for 5-room flats.

HDB rents are just 0.6 per cent down from its peak in August 2013.

Despite rents going up, the number of leases signed have actually gone down.

About 4,248 condominiums were rented in February this year, a 5 per cent decrease from the month before. However, it is still 1.3 per cent higher than a year ago.

Rented condominiums in the OCR accounted for the largest share at 37.3 per cent, while 34.1 per cent were in the RCR and 28.6 per cent were in the CCR in February this year.

As for HDB flats, with an estimated 1,406 being rented in February this year, the number of units rented went down by 19 per cent, compared with the month before.

Comparing with February last year, rental volumes have also decreased by 6.3 per cent.

Out of all HDB flats rented in February, 36.1 per cent were 4-room flats, 33.6 per cent were 3-room flats and 23.9 per cent were 5-room flats.

Property analysts cited a lack of new housing supply as the main reason pushing rents higher.

ERA Realty Network's head of research and consultancy Nicholas Mak said that the delay in completing the construction of new HDB flats and new condominium projects had caused some households to temporarily rent their accommodations.

The Covid-19 pandemic has also pushed some young residents out of their parents home to rent their own places, and some with their friends, he noted.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie said that many owners of private homes and HDB flats have been selling their units since resale prices have been on the rise over the past few months, yet new completions are not meeting the demand for housing.

Some property hunters could also be turning to the rental market as they have been priced out of buying a property or have been affected by the recent property cooling measures.

"Inflation and rising costs such as higher maintenance charges, climbing interest rates, higher property taxes, etc may also have a snowball effect on rents, as landlords pass on the costs to their tenants. Therefore, rents may continue to climb if inflationary pressures continue to escalate in the coming months," said Sun.

ERA's Mak also expects HDB and condo rents to increase by between 8 and 12 per cent this year as the pandemic-induced construction delays could still require some months before it is resolved.

"Furthermore, more Singaporeans, especially the younger households, are becoming more comfortable about renting their homes.

"In addition, as the economy recovers and the job market expands this year, more foreigners could be attracted to work and live in Singapore," he said.