Condo & HDB rents continue surge in May but volumes down year on year
Condo & HDB rents continue surge in May but volumes down year on year. RESIDENTIAL property rentals continued to rise in May, with both rental prices and volumes for condominium and HDB units rising month on month.
Huttons Mark Yip of Asia attributes May’s strong gains to a “much stronger-than-expected” return of foreign employment, which increased rental demand for both private condos and HDB flats.
The CEO does not expect the tight rental market to ease any time soon, with rents expected to rise in the coming months.
“Some expatriates are requesting that their employers increase their housing allowance to offset the relentless rise in rents.” This will raise the costs of doing business in Singapore and may reduce the Republic’s attractiveness in the long run,” said Yip.
He also anticipates an increase in demand for housing from international students as the new school year begins.
According to the most recent flash figures released on Wednesday (Jun 15) by SRX Property and 99.co, condo rental prices increased for the 17th consecutive month, rising 2.8 percent from April 2022 and 18.1 percent year on year.
Outside central region (OCR) had the highest month-on-month percentage increase of 3.3 percent, followed by rest of central region (RCR) and core central region (CCR) at 2.8 percent and 2.2 percent, respectively.
Year on year, rents in the OCR, RCR, and CCR increased by 19.7 percent, 18.6 percent, and 15.4 percent, respectively.
While overall condo rental volumes increased 11.7 percent from the previous month to 4,185 units, this was still 23.7 percent lower than the previous year. They were also 13.2 percent lower than the five-year average for May.
The OCR accounts for 41.1 percent of total volumes, with the RCR accounting for 31.9 percent and the CCR accounting for 27 percent.
In light of rising prices and inflationary pressures, Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, predicts that more private rental tenants will opt for smaller units or those located outside of the city center.
She sees continued strong demand in the suburbs, where private homes tend to have lower rents. Rents in the OCR may also rise in the coming months, according to her.
Rents in the HDB segment rose by 2.4 percent from April 2022 to May 2022, and by 16.2 percent year on year, with increases in both mature and non-mature estates and across all room types.
May HDB rental prices in mature estates rose by 1.8 percent from the previous month and 14.4 percent year on year, while non-mature estate rentals rose by 3.1 percent from April and 18.1 percent from May 2021.
The highest on-month rental increase was 3.3 percent for five-room HDB flats, which SRX and 99.co attributed to tenants’ preference for larger spaces.
Three-room, four-room, and executive flat rents rose by 2.1 percent, 1.9 percent, and 1.6 percent, respectively.
Annual rent increases for 3-room, 4-room, 5-room, and executive flats were 15.4 percent, 15.6 percent, 18 percent, and 11.4 percent, respectively.
From 1,492 units rented in April 2022, HDB rental volumes increased 8.4% to an estimated 1,617 units rented in May 2022. However, this was 17.3 percent lower than the previous year and 12.4% lower than the 5-year average volume for May.
In May, three-room, four-room, five-room, and executive flats accounted for 35.3 percent, 37.8 percent, 22%, and 4.9% of total HDB rental volumes, respectively.
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