SRX and 99.co report that the HDB leasing market gained momentum in December, despite a further softening of condo rental

The price of condominium rentals fell for the fifth month in a row last December. This wiped out all the gains made during the first half 2023. HDB’s rental market continued to grow in terms of both rents and lease volumes.

Flash data released by SRX on Thursday (18 January) showed that condo rental prices fell 0.5 percent from the previous months, with rental declines across all regions.

The overall condo rents are still 2.6% higher than December 2022 levels. Rents in Outside Central Region (OCR), Rest of Central Region(RCR) and both were higher by 4.4% and 2.6% respectively. Rents in the Core Central Region (CCR), however, were up by 0.9 percent on a year-over-year basis.

The decrease in private rental properties in December was milder than in November, likely due to a slight increase in demand for new employees starting in the new calendar year.

In 2024, landlords will be forced to pay higher property taxes and annual values. With interest rates high, many may opt to accept lower rents rather than leave the unit vacant.

Rental rates for private residential properties may fall by up to 15% in the next 12 months as the market normalises in 2024. This would mean that rates will be similar to those of 2022.

The price of a condo will continue to moderate at 2 to 5% in 2024. This is a significant slowdown from the 29.7% in 2022 and the 9.9% in 2021.

The number of condominiums leased increased by 14 percent on a monthly basis to 5,644 units.

As seen at the ends of 2022 and 20,21, there will be more landlords who are willing to accept lower rental rates as well as a greater number of lease renewals. The demand will probably continue in January 2024, as tenants sign new leases and renew leases.

Rental volumes fell by 11,6% on an annual basis. The volume was 12.6% lower than the average for the past five years. The OCR represented 38.2 percent of total leasing volume, followed by the RCR (33.6%) and the CCR (28.1%).

Rentals for HDB rooms are on the rise

HDB’s rental market continues to grow with a 1 percent increase in rents. The rental prices of mature estates increased by 1.2 percent, while the rents in non-matured estates rose by 1 percent.

Rents rose for all room types, with the three-room apartment gaining 2.1%, followed by executive flats (0.9%), four-roomers (0.1%), and five-roomers (1%)

Overall HDB rents increased by 10.1% in the past year. Rents for mature estates rose 10.4 percent, and those of non-matured estates rose 10.3 percent.

The largest increase in rental prices was recorded by executive flats at 14.7%, followed closely by five-roomers (10.7%), three-roomers (10.5%), and four rooms (8.9%).

lakegarden residences condo

HDB’s leasing volume increased by 7.4% to 2,891 units estimated in December from 2,693 in November.

The December volume was 0.1 percent lower than average for the past five years.

The most common flats were four-roomers, accounting for 36.2% of total leasing volume. Three-roomers accounted for 34.1%, followed by executive flats (5.7%) and five-roomers (24%).
Mixed outlook

Analysts have mixed opinions about the HDB market’s outlook for 2024, despite its growth.

HDB’s rental market will continue to grow, with an average rent of 8-10% in 2024. The number of rental contracts will range from 37,000 to 38,000 in 2023, and remain similar between 36,000 to 38,000 in the year 2024.

HDB expects rents to rise by 8 percent in 2024, despite the temporary relaxation of occupancy cap.

She does not anticipate rental increases despite a tightened HDB market and a reduction in the number of flats with minimum occupancy periods, as affordability is still tenants’ main concern.

HDB rent prices will stabilize in 2024 with a small gain of between 1 and 3 percent.

Expect HDB rental prices to begin declining in the first three months of 2024. HDB rentals cannot defy gravity as the rental rates of private residential property are expected to decrease in 2024.


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