Rental gap between demand and supply in 2024 could be wider

In October, the condominium rental market recorded its third consecutive monthly decline. Meanwhile, rents for Housing and Development Boards (HDBs) fell for only the first time in 2021.

According to SRX’s and’s flash estimates, the rents on the condo rental market fell by 0.2 percent in October 2023 compared to a month earlier. The Outside Central Region (OCR), which is the region outside the core central region (CCR), saw a 0.9% drop in rents.

Condo rental volumes were also down on a monthly basis. An estimated 5,402 units rented in September 2023 represents a 5.4% decline.

Property Watches attributed the stagnation in private rental rates to an increase in housing stock, due to the completion of more condominiums over the last year.

The holiday season is expected to continue to affect the rental volume of condos in the coming two months.

Experts warned of an additional slowdown on the private rental market by 2024, as domestic demand continued to shrink. They also predicted that an increase in housing supply could add downward pressure to rental prices.

Most private sector participants expect prices to grow by around 2 to 5 percent next year. This is down from 29,7 percent in 2022 and 12 to 14 percent in 2023.

Blossoms by the Park Floor Plan

Rents in the OCR increased by 12.2 percent and rents in the Rest of Central Region grew by 12.1 percent. The CCR rental market grew by 8.2 percent.

The rental volume increased marginally by 0.6 percent on the year. However, it remains 11.4 percent lower than the average five-year volume for October.

Rents were increased by tenants due to the increase in supply of rental flats.

By region, 34,3 percent of the total volume came from OCR. The CCR accounted for the remaining 30.9% of total volumes.

Prices on the HDB rental market have fallen by 0.4 percent from September 2023.

It could be because fewer tenants are renewing their leases, as they move to new homes due to the completion of new HDB flats and condos.

Rents on mature estates fell by 0.1%, causing the monthly decline. The increase in rents in non-mature estates was the same percentage.

The overall HDB rental volume increased on a monthly basis by 2.4%, with approximately 2,830 units rented compared to 2,763 units at the end of September 2023. Volumes for the month increased 14.9% when compared to last year.

The HDB’s rental volume in October was also a 1.7% increase over the average monthly volume of the past five years.

Rents of three-roomers have fallen by 0.6 percent from September 2023, but rents of five-roomers are down even more, at 1.4 percent. Rents for four-room apartments increased by 0.1%, while those for executive flats rose by 0.9%.

HDB flats are still the “most affordable choice” among budget-conscious tenants and those who have downgraded from private property to wait out their 15-month waiting period before they can purchase a resale apartment.

A higher unemployment rate, and a slower expected salary increase have led to more tenants being cautious with their budget.

The majority of HDB rentals, or 37.7%, are four-room apartments. The next highest were three-roomers (31.9%), followed by five-room units (24.5%) and executive units (5.9%).

The HDB rates are holding steady at the moment, but the increased supply of MOP apartments and the declining private rates will put downward pressure on HDB rates. This will result in a fall of HDB rates next year.

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