Condo rents inch up for 5th month as private, HDB rental volumes rise in November: SRX

SINGAPORE – More people rented condominium units and Housing Board (HDB) flats in November, even with border restrictions still in place.

The rental volume for condominiums rose 3.8 per cent month on month to an estimated 4,443 units in November from 4,281 units in October, according to flash data from real estate portal SRX Property released on Wednesday (Dec 16). Year on year, private leasings are 1.1 per cent higher than in November 2019, before the Covid-19 onset.

HDB rental volume climbed 6.7 per cent month on month to an estimated 1,762 flats in November, compared with 1,652 flats in October. Year on year, HDB leasings are down by 11.7 per cent from November last year.

ERA Realty’s head of research and consultancy Nicholas Mak said that while the month-on-month increase in leasing volume “may appear surprising” as foreigners are a major source of residential leasing demand, a group of new tenants could be newly married young couples.

“These young families could wish to live independently while waiting for their permanent new homes, such as HDB flats or executive condominiums, to be completed and may rent HDB flats or private condominiums (in the interim), depending on their housing budgets,” he said.

However, he noted that the increase in leasing volume is “marginal”, with mixed impact on the rental index as the HDB rental index remained unchanged, while that for private apartments rose just 0.4 per cent month on month.

Overall rents for condo units in November edged up by 0.5 per cent from the month before, climbing for the fifth consecutive month. Year on year, rents were still down by 0.6 per cent from November 2019.

Rents in the rest of central region and the outside central region increased by 1.6 per cent and 0.2 per cent month on month respectively, while those in the core central region decreased by 0.4 per cent.

Overall rents for HDB flats in November remained unchanged from the month before. But compared with a year ago, they are up by 0.8 per cent.

Rents in the mature estates decreased by 0.4 per cent, while those in non-mature estates increased by 0.6 per cent.

Rents for four-room, five-room and executive flats rose by 0.1 per cent, 0.4 per cent and 0.8 per cent respectively, while those for three-room flats decreased by 0.3 per cent.

Rents are down 13.7 per cent from their peak in August 2013, according to the SRX data.

ERA’s Mr Mak said he expects the Singapore housing market to get a “shot in the arm” next year as the Government rolls out the Covid-19 vaccination programme and gradually eases the border restrictions.

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“More foreigners are expected to return to Singapore next year, and one of the beneficiaries will be the residential leasing market,” he said.

Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said that one sector that may ramp up the employment of foreign professionals with niche skills is the digital financial sector, as the Monetary Authority of Singapore recently awarded four new digital full bank licences.

“These highly skilled workers, who will probably command higher incomes or housing budgets, will likely benefit the middle to upper tier of the rental market, such as private homes in the luxury and city fringe areas,” she said.

But she forecasts that overall rental volume next year may decline by 5 per cent to 8 per cent and rents may fall up to 4 per cent as more homes are completed amid macroeconomic uncertainties.

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