HDB rental volume drops in Q3 amidst new supply and holidays

Tenants shifting into the condo market is also putting pressure on HBD rentals.

The number of approved HDB flat rentals dropped 4.6% quarter-on-quarter (QoQ) in Q3 to 9,118 cases, from 9,554 cases in Q2, according to HDB.

Christine Sun, Chief Researcher & Strategist at Orangetee said, “The Q3 drop in rental volume is within expectation, similar to the downtrend observed in previous years. Rental activities usually taper off in the second half of the year, especially during the year-end holidays.”

Sun added that as more tenants shift to the condo market, HDB rental may continue to face pressure. “Leasing volumes may decrease to 36,500-38,000 units in 2024 from 39,138 units in 2023,” she said.

Lee Sze Teck, Senior Director for Data Analytics that aside from the year-end holidays, housing demand in Q4 may drop due to the ample supply of BTO flats released for sale in October. 

“Huttons is revising HDB resale volume up to between 29,000 and 30,000 for 2024 from an earlier estimate of 26,000 to 28,000. Prices of resale flats are forecast to grow between 8% and 10% in 2024,” Lee said.

Meanwhile, HDB’s Resale Price Index (RPI) increased 2.7% quarter-on-quarter (QoQ) to 192.9 in Q3, with resale transactions rising 10.7% QoQ to 8,142 cases. Sun said that the escalation in housing prices can be attributed to the tight housing supply.

“For the first three quarters of this year, prices rose by 6.9%, which is higher than the 3.8% growth registered over the same period in 2023 but slower than the 8% increase over the same period in 2022,” she added.