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Condo leasing market continues decline in February while HDB rents hit new all-time high

2024-03-19 00:00:00.0 海峡时报-新加坡原网页

SINGAPORE - Singapore’s private rental market remained soft in February, while Housing Board rents rose to reach a new all-time high after dipping the month before.

Based on flash estimates released by property portals Singapore Real Estate Exchange and 99.co on March 19, condominium rental prices fell 1 per cent from January to mark net negative growth for the 13th consecutive month.

The chief data analytics officer of 99.co, Mr Luqman Hakim, noted that condo rents had hit their lowest point since January 2023 and attributed this downward spiral to a supply glut that has been in place since 2023.

Ms Christine Sun, chief researcher and strategist at real estate firm OrangeTee Group, said: “Many condominiums reached temporary occupation permit last year, resulting in more new homes being put up for rental.

“The increased competition may have driven down rent prices in certain locations. As private rents continue to adjust, some tenants may switch from renting HDB flats to private homes in the coming months.”

By region, core central region (CCR) or prime area rents fell 1.6 per cent from January, with the rest of central region (RCR) or city fringe rents down 0.5 per cent, and the outside central region (OCR) or suburbs registering a 0.6 per cent decline.

Overall rents fell 4 per cent year on year, with rents in the CCR down 5.7 per cent. RCR rents declined 3.9 per cent and OCR rents dipped 2.1 per cent.

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Rental volumes for condos were lower as well, falling 21 per cent from the previous month and 7.7 per cent year on year to an estimated 4,715 units in February.

This was 11.9 per cent lower than the five-year average volume for the month of February.

By region, 35.8 per cent of total private rentals were from the OCR, with 32.8 per cent from the RCR and 31.4 per cent from the CCR.

Property firm ERA Singapore’s key executive officer Eugene Lim noted that the condo rental market was “facing challenges” amid rising retrenchments and more available homes for lease.

“Tenants are seeing more rental options on the market and some landlords are more willing to discuss rental terms, unlike a year ago,” he said.

On the other hand, HDB rents in February grew 1 per cent from January to a new all-time high but volumes fell 19.1 per cent to an estimated 2,448 flats rented, compared with 3,027 units in January.

Mr Luqman of 99.co said rising HDB rents were due to strong demand from renters seeking relief from inflation, as rents for condominium units were “still considered too expensive”.

Considering how the decline in volumes for condo and HDB rentals was mainly due to the Chinese New Year festivities in February, he expects volumes for both markets to pick up in the second quarter of 2024.