Housing demand hit by cooler jobs market

HDB and condo rental volumes dipped 19.1% MoM and 21.0% MoM, respectively, in February.

Weak hiring sentiments have led to a decrease in demand for homes.

In February, rental volumes of both HDB flats and private condominiums fell double digits by 19.1% MoM and 21.0% MoM, respectively.

“Although the economic indicators were better in the first two months of 2024, hiring sentiments remained weak as companies prefer to err on the side of caution. Some companies continue to restructure and consolidate their workforce,” Huttons said.

Huttons noted that rental volumes for HDB flats in February 2024 dropped to their lowest level in a year to 2,448. 

The expert, however, underscored that the lower rental volume of HDB flats could also be due to more tenants moving to a larger HDB flat due to policy change.

OrangeTee echoed this: “With the recent relaxation of the occupancy cap for larger HDB flats, which now allows up to eight unrelated persons to live in a single unit, we expect demand for big flats to remain robust.”

“Furthermore, the supply of HDB resale flats remains limited, with fewer HDB flats having met the MOP requirement this year. Therefore, the limited supply of new MOP flats may prop up HDB rentals for a while unless private rents dip drastically and post as competition to the HDB market,” OrangeTee said.

Private rents have dipped by 5.2% for seven consecutive months. 

“The primary reason for the current private rental price correction is the increase in private housing supply. Many condominiums reached TOP last year, resulting in more new homes being put up for rental. The increased competition may have driven down rent prices in certain locations. As private rents continue to adjust, some tenants may switch from renting HDB flats to private homes in the coming months,” OrangeTee said.