SRX, 99.co: HDB leasing gains momentum in Decemeber as condo rentals continue to soften
Mixed opinions on the outlook
The HDB rental market has been on the rise in recent years, but analysts have mixed views about its outlook through 2024.
HDB, which offers affordable housing options, will remain resilient, with the average rental increasing by 8 to 10% in 2024. Experts predicted that the number of approvals for rental housing would range between 37, 000 and 38, 000 in 2023 and remain between 36,000. and 38,000. contracts in 2024.
HDB rents are expected to rise up to 8% in 2024 due to the temporary relaxation in the occupancy cap.
As long as interest rates remain high, it is likely that more landlords will opt for lower rents than to leave their units vacant.
Rents for private homes could drop by 10 to 15% over the next year as supply and demand in the rental market continues to normalise.
The rise in condo rental prices will be 2 to 5 percent in 2024. That’s a much slower rate than the 29,7 per cent growth in 2022 or the 9.9 percent in 2021.
Condo leasing volume increased by approximately 14 per cent in the last month, to 5,644 estimated units.
There will be an increase in the number of landlords who accept lower rents and more lease renewals prior to the start of the new year, as was seen at the end 2022. Tenants will continue to sign leases for new apartments or renew their leases in January of 2024.
The rental volume was down 11,6 per cent on the year. It was 12,6 per cent less than the volume average of the last five years for December. The OCR accounted 38.2 % of total leasing volumes.
Rents on HDB rooms have risen+
HDB continued to revive its rental market with an increase of 1 per cent in total rents. The average rental price in mature estates increased 1.2 percent while that in non-mature areas rose 1 percent.
All room types saw rents rise, with three-room apartments gaining by 2.1 percent, followed closely by five-roomers gaining 1 percent, executive flats gaining 0.9%, and four-roomers gaining just 0.1 cents.
HDB rents have increased 10.1% year-on-year. The rents of mature estates grew by 10.4%, while the rents of non-matured areas grew by 10.3%.
Executive flats saw the highest rental increases of the year, at 14.7%. This was followed by the five-roomers (10.1%), three-roomers (10.1%) and four-roomers (9.9%).
HDB leased 2,891 apartments in December, up 7.4 percent from the 2,693 flats in November.
The volume in December was 12.8% higher than it was in December 2022. However, the average five-year volume for December months is 0.10% lower.
Three-roomers accounted for 34.1% of all leasing transactions. Three-roomers made up 34.1% of the total leasing volume, followed closely by five-roomers and executive flats (5.7%).
She doesn’t expect any rental hikes despite the tightening HDB market, with a smaller number of flats that require a minimum period of occupation. The tenants are still concerned about affordability.
HDB rental rates are expected to stabilize by 2024. A slight increase of 1 to 3% is anticipated.
Expect HDB rates to start decreasing in the first quarter 2024. HDB rental rates will not continue to defy gravity if private residential rentals are set to fall in 2024.
Last December, condominium rental prices fell for a fifth consecutive month, wiping away the growth in the first six months of 2023. HDB rental prices and volumes continued to rise, but the Housing and Development Board (HDB).
The flash data from SRX released on January 18 indicated that the rental price of condos fell by 0.5 per cent compared to the previous month. Rentals declined in all regions.
Overall, condo rents in December 2022 were 2.6% higher. Rents for the Outside Central Region and Rest of Central Region were respectively higher by 4.4 and 2.6 percent. Core Central Region rents (CCR) were higher by 0.9 per cent on the previous year.
The decline in private rentals is less than it was in November. This may be due to the slight rise in demand caused by new hires who started work in January.
