In July 2023, Housing Board (HDB) flat rents increased by 2%, marking the 37th consecutive month of rent hikes, following a 1.4% increase in June. Overall, HDB rents have risen by 24.1% between July 2022 and July 2023, based on data from real estate portals 99.co and Singapore Real Estate Exchange (SRX).
Similarly, condominium rents also saw an upward trend, rising by 1.1% in July, following a 0.2% increase in June. On a yearly basis, condominium rents experienced a significant surge of 21.6%.
Rental volumes also showed significant growth. HDB rental units increased by 11% in July, with approximately 3,320 units being leased compared to 2,990 in June. This was the highest HDB rental volume recorded since August 2022. Condominium rental volumes surged by 25.3% in July, with an estimated 7,282 units leased compared to 5,810 in June.
Analysts predict that the rental market will continue to gain momentum in the third quarter, typically recording the highest rental volumes between July and September. They suggest that the increase in HDB rents and volumes reflects tenants opting for more affordable housing amid economic uncertainty and higher retrenchment levels in the first half of 2023. Tenants are relocating from centrally located condominiums to suburban condominiums or choosing HDB flats, which are relatively more affordable than private condominiums.
The increase in rents for HDB executive flats, compared to smaller flat types, indicates that tenants searching for condominiums may have switched to renting executive flats, which have lower rents. Additionally, some buyers of recently launched condominium units may have sold their HDB flats and temporarily rented other flats to avoid higher additional stamp duties.
Condominium rents in the suburbs saw a rise of 1.6%, while those on the city fringes increased by 1.1%, and prime district rents edged up by 0.7%. Suburban areas dominated the condominium rental volume in July, accounting for 37.4%, followed by city fringes at 34.3%, and prime districts at 28.3%.
However, experts predict that the growth in condominium rents may begin to ease in the second half of 2024, with approximately 23,400 private housing units due for completion in the second half of 2023 and 2024.