While condo rents see a modest increase, the HDB rental market shows growth amid constrained supply.
The rental market for Housing & Development Board (HDB) flats saw a slight increase in October 2024, with prices rising by 0.5% compared to the previous month. Rents in mature estates increased by 0.9%, while non-mature estates experienced a small decline of 0.2%. This upward pressure on HDB rents is attributed to a limited supply of available flats, with fewer units reaching the minimum occupation period. Analysts predict that this trend will continue through the end of 2024, with rents expected to increase by 2-3%.
Rents for different HDB unit types saw varying changes. Three-room flats saw a 1.2% rise, while rents for five-room flats increased by 0.7%, and executive flats rose by 0.8%. On the other hand, rents for four-room units fell by 0.3%. Year-on-year, overall HDB rents grew by 4.6%, with the highest increase recorded in executive flats (6.4%), followed by three-room flats (5.6%).
Meanwhile, the condominium rental market showed a decline in October, with volumes falling 7.5% compared to September. However, compared to October 2023, condo rental volumes increased by 5.3%. By region, the Outside Central Region (OCR) contributed 34.8% of the total rental volume, followed by the Rest of Central Region (RCR) at 33% and the Core Central Region (CCR) at 32.2%.
Despite the drop in condo rental volumes, rents in the condo market rose by 0.5% in October. This increase was driven by a 0.8% rise in rents in the RCR and a 0.5% rise in the CCR, while rents in the OCR remained flat. Year-on-year, however, overall condo rents were down 2.8%, reflecting market stabilization after previous declines.
Experts suggest that the contrasting performances of the HDB and condo rental markets highlight the diversity in tenant preferences. Some tenants are shifting towards private properties, drawn by stabilizing rents and lower borrowing costs, which may help stabilize private rental prices. The improving business sentiment and employment growth, fueled by lower borrowing costs, may further support both HDB and condo rental markets.
Some market experts anticipate that the condo rental market may end the year flat, with demand slowly returning as the economy improves. Meanwhile, HDB rents are expected to continue rising between 3% and 4% through 2024.
