HDB rents, volumes rise in March as condo market dips: SRX, 99.co

Apr 26, 2023

HOUSING and Development Board (HDB) rents and leasing volumes rose in March, while the condominium rental market fell, as renters shifted to smaller and less pricey HDB flats amid rising costs.

Flash estimates from SRX and 99.co released on Wednesday (Apr 26) showed that March HDB rents increased 0.7 per cent from the previous month.

In March, about 3,007 HDB flats were leased out, up 14.8 per cent from the 2,619 units rented in the month before and 1.1 per cent higher year on year.

The month’s volume is 0.1 per cent higher than the five-year average for the month of March.

Rents in mature estates rose by 0.2 per cent from February, while those in non-mature estates increased by 1.2 per cent.

By flat type, rents were up for three-room (2.1 per cent), five-room (0.8 per cent) and executive flats (0.3 per cent), while four-room flats fell 0.4 per cent.

“The rise (in HDB rents), as opposed to condo rentals, could be reflective of tenants switching to lower rental alternatives in the HDB market,” said Luqman Hakim, chief data and analytics officer at 99.co.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, expects more renters to shift downstream if condo rents remain elevated.

Year on year, overall HDB rents were 26.8 per cent higher, with rents in mature estates up 25.3 per cent and non-mature estates up 28.3 per cent. All room types saw rent increases ranging from 25 per cent to 30 per cent.

Apart from those waiting to move into their new flats and crossovers from the condo market, ERA key executive officer Eugene Lim pointed to demand from “a growing number of former private property owners purchasing resale HDB flats that are renting while they are serving out the 15-month wait-out period”.

Three-room flats made up 33.8 per cent of HDB leases in March and four-room flats, 37 per cent. Five-room flats made up 23.7 per cent, and the remaining 5.5 per cent were executive units.

In the condo market, March rents fell by 0.3 per cent month on month. Rents in the Rest of Central Region (RCR) dipped 0.4 per cent, and Outside Central Region (OCR) rents slid 0.2 per cent. Only Core Central Region (CCR) rentals rose slightly, by 0.1 per cent.

ERA’s Lim said this is the first time condo rents have declined since they started rising some three years ago.

“This could signal that the condo rental market has hit resistance levels,” he added.

Year on year, overall condo rents are still up 32.3 per cent, with increases of about 30 per cent logged across regions. Some 36.6 per cent of condos leased in March were in the OCR, 34.6 per cent in the RCR and 28.8 per cent in the CCR.

An estimated 4,914 condo units were rented in March, down 4 per cent from February. This is 22 per cent lower than in the previous year, and 21.2 per cent lower than the five-year average for the month.

Huttons chief executive officer Mark Yip expects both the condo and HDB markets to stabilise on higher supply, and rental growth to moderate to around 10 per cent in 2023.

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