Stronger demand push condo and HDB rents higher

“Too early to call bottom.”

Stronger leasing demand helped push rental prices in condos and HDB flats to rebound in March and end seven consecutive months of declines, according to property analysts.

“It may be too early to call a bottom in the condo rental market,” said Mark Yip, CEO at Huttons, noting that not all segments of the market booked higher rents and the rising demand for condo rentals might be partially caused by landlords tempering their rental expectations.

“Rather than leaving their condo units empty, landlords would prefer to rent out their units to at least cover their mortgage installments and taxes,” Yip said.

He said leasing demand in both condos and HDB flats picked up last month, with the latter partly caused by the higher volume of Malaysians seeking employment in Singapore.

Data from 99.co and SRX showed rents in condos inched up by 0.3% MoM last month, while HDB rents rose 0.6% during the same period.

For OrangeTee’s chief researcher and strategist, Christine Sun, the improvement in the rental market may signal the narrowing gap of rental prices between private rental properties and HDB flats.

Sun said leasing contracts for private rental condominiums was also higher compared to HDB flats last month.

“This shift may be due to a narrowing of rental prices between private properties and HDB flats, making condominiums a more attractive option for some tenants,” she said.

ALSO READ: Condo rents see modest rise in March, up 0.3% MoM

Moving forward, Yip sees the condo rental market improving in the second half of the year as the economy and the labor market improve. HDB rents are also predicted to climb by up to 8% for the entire 2024, driven by tenants seeking affordable housing options.