Condo and HDB rental markets dip in volumes in August 2023

In August 2023, the rental markets for both Condos and HDBs in Singapore have seen a significant shift. The month recorded a fall in rental volumes for both property types, with a possible cooling observed in HDB rental prices.

This article delves into the detailed statistics of the rental market, providing insights into the current trends and potential future movements, including expert comments from the Chief Data and Analytics Officer at 99.co, Luqman Hakim.

Condo rental market

Rental prices:

Monthly decrease: Condo rents in August 2023 have decreased by 1.0 per cent from July 2023. The CCR region saw the most significant drop of 1.7 per cent, followed by RCR at 0.7 per cent, and OCR at 0.5 per cent.

Annual increase: Year-on-year, overall rents have surged by a substantial 17.3 per cent, with OCR leading the increase at 20.1 per cent. Rents in CCR, RCR, and OCR increased by 13.9 per cent, 17.4 per cent, and 20.1 per cent respectively year-on-year.

Luqman comments that Condo rental price is down by one per cent, reverting to the mean that was established in the past six months since March 2023. This further confirms that a rental ceiling might have already been reached for the Condo market.

Rental volumes:

Monthly decrease: Rental volumes have dipped by 7.6 per cent month-on-month, with an estimated 6,730 units rented in August 2023 compared to 7,287 units in July 2023.

Annual decrease: Year-on-year, rental volumes are 10.3 per cent lower and 11.6 per cent lower than the 5-year average volume for August.

Regional breakdown: In August 2023, 36.2 per cent of the total volumes are from OCR, 33.6 per cent from RCR, and 30.2 per cent from CCR.

August is the month where it is natural to see a drop in rental volume in the Condo market following its volume year-high that usually occurs in July. Unlike Condo, HDB rental volume is not that predictable for July and August and for this time, it seems to follow a drop seen in Condo as well, says Luqman.

HDB rental market

Rental prices:

Monthly increase: HDB rents have seen a slight increase of 0.1 per cent from July 2023, with both Mature and Non-Mature Estates recording the same increase. 3 Room and 5 Room rents increased by 0.7 per cent and 0.5 per cent respectively while 4 Room and Executive rents decreased by 0.3 per cent and 1.5 per cent respectively.

Annual increase: Year-on-year, overall rents have surged by 20.8 per cent, with all room types recording rent increases: 3 Room by 18.6 per cent, 4 Room by 21.0 per cent, 5 Room by 22.6 per cent, and Executive rents by 23.4 per cent.

As said by Mr. Luqman, "Despite continuous MoM increases for 3-Room and 5-Room HDBs, the overall marginal increase of 0.1 per cent in August is the lowest in the past two years, suggesting a possible onset of rental price cooling.".

Rental volumes:

Monthly decrease: Rental volumes have decreased by 10.1 per cent month-on-month, with an estimated 2,997 HDB flats rented in August 2023 compared to 3,334 units in July 2023.

Annual increase: Year-on-year, rental volumes have increased by 16.9 per cent.

Room type breakdown: In August 2023, the majority of the rental volumes are from 4 Room flats at 37.7 per cent, followed by 3 Room at 32.3 per cent, 5 Room at 24.1 per cent, and Executive at 5.9 per cent.

"Unlike Condo, HDB rental volume is not predictably lower in August, but this time it followed the drop seen in the Condo market", says Luqman.

Conclusion

The data from August 2023 highlights a mixed trend in the rental markets for both Condos and HDBs in Singapore. While there is a month-on-month decrease in rental volumes and prices for condos, the year-on-year data shows a substantial increase. The HDB market, on the other hand, sees a slight increase in rental prices but a drop in volumes.

ALSO READ: August resale condo 2023: Price fluctuations, expert opinions and market outlook

This article was first published in 99.co.