HDB rental demand recovers in H2 2024, to weaken in 2025: report

In 2025, supply is expected to decrease, and rental growth is projected to slow.

In H1 2024, the growth in HDB rents moderated to 1.4% year-on-year (YoY) due to tenants moving into condos and a lower supply of flats during the period, Huttons reported.

In H2 2024, Huttons estimates that rental demand for HDB flats strengthened, driven by an increase in launches, some of which achieved remarkable take-up rates ranging from over 50% to as high as 99%.

Huttons said that some of these buyers were HDB upgraders who may sell their flats and rent in the interim to avoid paying the ABSD on a second property.

Data from Huttons estimates that the number of HDB flats rented out in 2024 is around 37,500, 4.2% lower than the 39,138 flats rented out in 2023.

Meanwhile, HDB rents are projected to increase by up to 4% in 2024, lower than the 10.1% growth seen in 2023.

In 2025, the number of HDB flats meeting the 5-year Minimum Occupation Period (MOP) condition for subletting the entire flat is projected to drop to a low of around 7,000 units. 

In addition, the completion of private residential homes is expected to decline to approximately 5,300 units due to fewer tenants moving into newly completed condos and fewer flats available for subletting. Overall, the supply of HDB flats for subletting will decline.

Huttons estimates that more than 6,500 units will be launched for sale in the Rest of Central Region (RCR) and Outside Central Region (OCR) in 2025 which may attract more HDB upgraders and drive additional rental demand for HDB flats in the interim.