The rental market of Singapore's HDB in 2023 has undergone substantial changes. Housing in Singapore, as one may expect, has seen some drastic shifts, particularly with rental prices hitting all-time highs. The article focuses on the details of the HDB rental market with the information needed by prospective tenants and property owners.

Benefits of renting HDB flats

Renting an HDB flat in Singapore is not just about money. The benefits extend beyond monetary considerations:

• Mobility: Renting has the benefit of working closer to jobs increasing commuting time and improving work-life balance.
• Flexibility: Unlike a 25-year mortgage, renters are not encumbered in that fashion. Upon the expiry of their rental agreement, they can easily relocate to other neighborhoods or house types.
• Migration: Renting is an ideal option for individuals considering relocating abroad and seeking temporary accommodation.

HDB Public Rental Scheme

The HDB Public Rental Scheme is an initiative by the Housing & Development Board of Singapore, designed to provide heavily subsidised housing options for Singapore Citizen (SC) households who lack other housing alternatives. Given the limited number of rental flats available under this scheme, there are specific eligibility criteria that applicants must meet to qualify for a rental flat. The scheme encompasses various aspects:

1. Eligibility criteria and schemes: Applicants must satisfy certain conditions to be eligible for a rental flat.
2. Flat types and locations: The Public Rental Scheme offers different flat types and locations.
3. Rents and deposits: Rental rates are determined based on factors such as income, the type of flat, and the status of the applicant.
4. Application and selection: This section provides a comprehensive overview of the application submission process, including the necessary documentation.
5. Changes and cancellation: Information on how to modify a rental application and the procedure for cancellation is provided.
6. Tenancy matters: This covers essential tenancy-related topics, including rent payment and changes in tenancy.
7. Rental assistance: Financial support is available for applicants facing financial challenges.

This scheme is a testament to the Singapore government's commitment to ensuring that its citizens have access to affordable housing options.

HDB rental prices in Q2 2023

The second quarter of 2023 has provided a mixed bag of rental prices:

• 3-room flats: These rates went between S$2,350, and S$3,000.
• 4-room flats: The average monthly rent ranged between S$3,000 and S$4,280 per month.
• 5-room flats: The rental charges ranged from S$3,100 to S$4,200 depending on the location.

Data source: HDB

(*) fewer than 20 HDB rental transactions

(-) no rental transactions

Affordable options for budget-conscious families included heartland areas like Bedok and Bukit Panjang, which provided excellent facilities at reasonable prices.

Comparative analysis (Q1 and Q2)

Different locations in town and various flats have experienced a number of changes in their property marketplaces. These variations are presented in the table below which shows growth and decline points. This comparative analysis underscores the dynamic nature of the HDB rental market, offering a year-on-year perspective on its ever-evolving landscape

Rental trends in 2023

The beginning of 2023 witnessed a significant surge in rental prices, reaching levels not seen in over a decade. This 13-year record high has been attributed to various market dynamics and shifts in housing demand. Despite this sharp increase, industry experts maintain a positive outlook for the remainder of the year. They believe that the market will adjust and find a more balanced state as several factors come into play.

In the second quarter of 2023, HDB statistics revealed a notable increase in the supply of rental flats, with a 1.9 per cent rise quarter-on-quarter (QoQ) and a 5.7 per cent growth year-on-year (YoY). As we move into the second half of the year, while landlords might initially maintain their rental price expectations, the growing availability of HDB rental units could persuade them to adjust their prices to align with market demand, ensuring they attract and secure tenants.

One of the primary factors expected to influence the rental market is the influx of completed Build-To-Order (BTO) flats. As these new units become available for rent, they will contribute to a larger supply of Housing Development Board (HDB) flats in the rental market.

This increased availability is anticipated to introduce more competitive pricing, ultimately benefiting renters. With more options to choose from and potentially lower prices, renters might find it easier to secure housing that fits their needs and budget.

Additional insights

August 2023 marked a significant month, with HDB rents witnessing a mere 0.1 per cent rise, the lowest in almost two years. This could signal a potential slowdown in the HDB rental market. Concurrently, condo rents experienced a one per cent dip.

Factors such as the completion of new BTO units and changing market dynamics contribute to these trends. The year-on-year growth in HDB rental transactions suggests that HDB flats remain a popular choice, especially for those priced out of the condo market.

Conclusion

The HDB rental market in 2023 is a testament to Singapore's ever-evolving housing landscape. While challenges persist, the future holds promise. With increased housing options and potential stabilisation of prices, both renters and landlords can navigate the market with informed choices.

ALSO READ: Condo and HDB rental markets dip in volumes in August 2023

This article was first published in 99.co.