Record $8,000 rent for 3-room Bukit Merah HDB flat a 'one-off event': Experts

A three-room Housing and Development Board (HDB) flat in Bukit Merah was rented out for a whopping $8,000, setting a new market record for the priciest rent for a public housing flat, reported The Business Times on Wednesday (Sept 25).

The unit is located at Block 12, Taman Ho Swee and was transacted in August this year, according to a caveat check by AsiaOne on the HDB website. The entry has since been removed.

This block is nestled behind a row of blocks along Bukit Ho Swee and is an eight-minute walk from Havelock MRT station. 

A similar three-room flat at 581 sq ft big over at neighbouring Block 14, Taman Ho Swee is currently listed for rent on PropertyGuru for $3,500 per month.

As a comparison, other three-room flats at Block 12 were rented out for between $900 and $3,300 this year, according to the HDB website.

This $8,000 record rent is an unusual occurrence, property experts told AsiaOne.

According to data found on the HDB website, the median rent for three-room flats in Bukit Merah was $2,970 as of the second quarter of 2024.

Even four and five-room flats in the same area had a median rental of $3,800 and $4,000 respectively, making up less than half of the rent for the unit in question.

'Significant outlier'

Speaking to AsiaOne, Mohan Sandrasegeran, Head of Research and Data Analytics at Singapore Realtors Inc (SRI), assured that the $8,000 rental rate does not reflect broader market trends.

He called it a "significant outlier" as the general market "continues to reflect more affordable rates".

Sandrasegeran noted that the majority of the transacted market rental rates for three-room flats in Bukit Merah were between $2,000 and $4,000 for the first eight months of this year.  

And that is is consistent with the affordable rental rates in the area.

Sandrasegeran added that with a significant boost in public housing supply underway, overall housing demand is expected to be eased, especially in the rental market as more rental units become available when households move into their new homes.

Various government measures such as the Public Rental Scheme and the Parenthood Provisional Housing Scheme and relaxing of occupancy cap for larger HDB flats and private properties, have already resulted in rents stabilising across both private and public housing sectors, he said.

'High price point might include other services'

His sentiments were echoed by Nicholas Mak, chief research officer of real estate platform Mogul.sg, who said that the high rental cost for the unit was "highly unusual" and likely a "one-off event".

"We cannot look at this instance and say that rentals are rising," Mak told AsiaOne.

Citing previous spikes in rentals caused in 2022 and 2023 by construction delays during the pandemic which resulted in a limited supply of rental flats, Mak explained that with "things easing up" recently, rentals are showing a downward trend.

He pointed out that the next five highest rentals for HDB flats were for five-room and Executive Condominium units, and those did not fetch a rental price of more than $6,500.

"One possible reason for this high price point could be... the owner is providing other services for the tenants beyond unit rental," he said.

Mak cited instances where parents residing overseas request for acquaintances to look after their child who is residing and attending school in Singapore.

"It is possible the tenants are minors under the care of the owner of the unit, which would account for the high cost," he said.

When asked if the flat's location could be a factor in its price point, Mak said that it was likely to be a small factor and not the main reason.

He stated that with newer HDB blocks in the same area with flats valued at over $1 million and the highly sought-after Pinnacle@Duxton being nearby, it is unlikely that this unit in an older HDB block would be rented out for such a high rate simply because of its location.

ALSO READ: 5-room HDB flat in Tanjong Pagar rented out for record $7,600

bhavya.rawat@asiaone.com