Rents for HDB flats increase for 37th straight month
Rental for HDB flats climbed for the 37th consecutive month. It rose to 2% compare to 1.4% increase in June.
Overall the public housing rental went up to 24.1% from July 2022 to July 2023. The reports were extracted from data collected by real estate portals 99.co and Singapore Real Estate Exchange (SRX) that was released.
However that being said, rental for condominiums declined 1.1% after a 0.2% climb in June. Year on year transacted rental rose by 21.6%.
Rental volumes rose in July
Hdb flats transacted rental soared 11 percent compared to June. 3320 hdb flats were rented in July compared to 2990 units in June. This numbers us the highest transacted volume recorded since a year ago in August 2022 according to the 99.co’s chief data and analysts officer
In the private condominium saw 7282 units being transacted in July 2023 compared to 5810 units in June 2023. These figures are in tandem with the analysts’ prediction that the rental market would gather speed in the 3rd quarter. The highest rental values are usually recorded between July and September.
Increase in HDB rents and volumes signals going towards cheaper housing options
Mr Eugene Lim, key executive officer of ERA Realty Network said that apart from relocating from a centrally located condominiums to suburban condominiums, some tenants are also renting HDB flats. Hdb Rents are generally more affordable compared to homes in condominiums.
Mr Luqman from 99.co viewed that HDB rents had gone up because landlords capitalised on the rental gap between public housing and condominium units. This was supported from the 4% rise in rents for executive HDB in comparison to 1.4% for 3room flats and 2.4% for 4room flats and 1.9% for 5room flats.
The numbers showed that some tenants who were looking to rent condominiums had switched to renting executive HDB flats which were cheaper than private condominiums.
Mr Mark Yip, chief executive officer of Huttons Asia said that some of the new launch condominium buyers may have sold their existing HDB property to capitalise on not paying for higher ABSD. In return, they may be renting interim HDB flats while waiting for their new property to be ready.
Since April of 2023, the government released a new policy where 2nd property owners had to pay 20% additional buyer stamp duty (ABSD) from the previous 17%.
Higher rents in the prime district
Due to the disparity in rental expectations between tenants and landlord, a handful of tenants have relocated to the suburbs.
On average a 1000sqft to 1500sqft in the prime area would cost $6600 a month to rent compared to $5500 for a unit at the city fringe and $4800 for similar sized unit in the suburbs.
According to the reports by 99.co and SRX, the suburbs had the most number of transacted rental volume in July at 37.4%. The city fringe condominiums had 34.3% and the prime district condominiums at 28.3%.
Rents for condominiums in the suburbs rose 1.6% while rates in the city fringes climbed 1.1% and those in the prime area went up by 0.7%.
Mr Nicholas Mak, chief research officer of property portal Mogul.sg predicted that condominium rents could ease in the second half of 2024. Reason being 23,400 private homes are to due to complete on the second half of 2023 through 2024.
