Demand-supply imbalance could widen in 2024 as rents fall

In September 2023, the HDB rent market prices fell by 0.4 %.

Most experts expect the downward trend in condo rentals to continue for the next two-months due to the holidays.

Experts warned about a further slowdown of the private market rental in 2024. The domestic rental demand is continuing to decline, and an injection of housing will likely add downward pressure.

The private market is expected to see a price increase of around 2% to 5% in the next year. This compares to 29.7% in 2020 and 12.5% to 14.5% in 2023.

Rents in OCR were up 12.2 percent and 12.1 percent in RCR. CCR rents increased by 8.2 %.

Rental volumes were up a mere 0.6 per cent year-on-year, but still remain 11.4 per cent below the five year average for October.

HDB monthly rental volumes in October also increased by 1.7% over the five-year average.

In terms of volume, the OCR accounted for 34.4%, and RCR was close behind with 34.3%. The CCR was responsible for 30.9 percent of the total volume.

This could be the result of less lease renewals because more tenants have moved to new houses as HDB and condominiums continue to be built.

HDB’s total rental volume grew on a month to month basis by 2,4 per cent. In September 2023, 2,763 HDB units were rented. A year-on-year analysis showed that the monthly volumes increased by 14.9%.

The housing and Development Board’s (HDB) rents dropped for the very first time in October 2021.

According to SRX &, flash estimates show that condo rental rents fell by 0.2 % from a prior month in October 2023. The Outside Central Region saw a 0.9 percent drop and the Core Central Region a 0.3 percentage point decline.

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In September 2023, the number of condo rentals was 5,713 compared to 5,402 in August. That’s a drop by 5.4 per cent.

Property Watches attribute the stagnation of private rent prices to a significant growth in housing supplies, since more condominiums have been built over the past twelve months.

HDB flats will remain “the best choice” for tenants looking to save money, or those wishing to downgrade from their private homes during the 15-month-waiting period required before they may purchase a used flat.

In light of a higher unemployment and a lessening salary growth, many tenants have become more cautious about their rental budget.

According to the room type, a majority of HDB’s total rental volume (36.7%) comes from flats with four rooms. The three-roomer (31.9%) was followed closely by the five-room unit (24.5%). And finally, executive units (5.7%).

Even though the HDB rentals rates seem to be holding firm, the rising private rents and new supply MOP flats will push down the HDB rentals rates.

The availability of more flats to rent has given tenants greater options for negotiating with landlords.

The monthly decrease was primarily due to the rents of mature estates dropping by 0.1 percent. This was partially offset by a rise in the rents for non-matured estates.

Rents for three roomers dropped by 0.6 % from September 20,23 levels. Five-roomer rentals fell even further, by 1.4 %. Rents of executive flats grew by 0.9 %, while four-room apartment rents rose by only 0.1 %.

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