HDB and condo rents soften in May as leasing volumes dip
Rents for Housing and Development Board (HDB) flats have dipped in the first time since the beginning of January, because renters are now looking at the condo market, where rents are continuing to fall.
Flash estimates published on 21 June, by SRX & 99.co revealed that HDB rentals had decreased by 0.3 percent from month to month, but were still 6.2 percent higher year-on year.
Market watchers attribute the decline in rents to a decrease in the demand for both markets, because of a weaker employment market.
Many young Singaporeans are also being encouraged by the weaker job market to hold off the process of moving out of their parents’ home and renting their own place or returning home to their parents.
The employment market continued to be soft for sectors like IT, which has affected the amount of employment pass (EP) holders and the need for condos.
The continuous tightening of the requirements for the S Pass is leading to fewer S Pass holders. At the same time condominium renters looking for an HDB rental apartment.
A downward trend for rentals However, it could be beneficial to firms looking to expand their workforce since the costs of housing for expatriates become more affordable.
The rental rates on the condominium market have continued to fall for the second straight month. They are down 0.5 percent from the previous month.
Comparatively to the same timeframe the year prior the recession, condo rents fell 4.5 percent.
The decline in rents in both markets occurred as the volume of leasing for both markets declined.
HDB rental volume fell by 13.2 percent, to 2,558 units compared to 2,946 units in April. Year on year, volume was lower by 12.3 per cent, and 8 percent lower than the average of five years for May.
Four-room flats made up 38.1 percent of HDB rental numbers in May, being followed by 35.4 per cent for three-room flats, 22 percent for five-room flats, and 4.5 percent for executive flats.
Rents for five-room flats were higher by 0.8 per cent in May, compared to the previous month; rents for other room types decreased.
The three-room flat rental rate recorded the largest decrease in month-to-month terms of 0.7 per cent. The rent for a four-room apartment (down by -0.5 percent) and the executive apartment rents (down by -0.4 percent) was next.
Rents for mature estates dropped 0.8 per cent from April, and those for non-mature estate rose 0.5 percent. Year on year, mature and non-mature estate rents grew by 5.9 per cent and 6.9 per cent, respectively.
Rents could have fallen due to lower HDBs rented out in particular if landlords or tenants are traveling abroad during the weeks preceding the holiday in June.
Rents can increase following vacations.
The number of condos rented dropped by 12.2 percent in just one month, to 5,155 units, down from 5,874 in April. Year on year rentals were 0.4 percent lower, and 5.7 percent lower than the five-year average for May.
The Outside Central Region (OCR), which accounted for 35,5 percent of all transactions in may it was only slightly ahead of the other regions. The Rest of Central Region contributed 33.5 percent while the Core Central Region contributed 30.9%. Core Central Region (30.9%).
Rents in the three regions all fell month-on-month however the RCR had the largest decrease, which was 1.1 percent. Rents decreased by 0.2 percent in the CCR as well as by 0.7 percent in the OCR.
CCR rents recorded a year-on-year fall of 3.7 percent, and RCR and OCR rents each fell by 4.9 per cent.
