The rental volumes of HDB flats and condominiums declined in September. This was a continuation of the decline in August.

According to Friday’s flash estimates released by SRX and 98.co, HDB rents are on the rise again while condo rentals continue to fall.

The data showed that the number of condos rented in August was down 15.2 percent to 6,736. The volume was down 12.7% year-on-year and below the average for September over the past five years.

Approximately 35,7% of the total volume came from Outside Central Region. This was followed by 33,1% from Rest of Central Region and 31,1% from Core Central Region.

The HDB rental market saw a 7.8% drop in volume from 2.998 to 2,763 units rented. Volumes rose by 20 percent year-on-year and 5 percentage points higher than average for September.

ERA Singapore’s key executive officer Eugene Lim stated that the HDB market is experiencing a softer rental demand, mainly because of the influx of newly completed condos over the past few months.

According to SRX data and 99.co, 37.4 percent of the units rented were flats with four rooms, followed by flats with three rooms at 32.8%, flats that have five bedrooms at 24.3%, and flats for executives at 5.55%.

HDB rents increased by 0.4 percent on a monthly basis, continuing the downward trend. They were also up 18.2 percent on a year-over-year basis. Rents for mature estates and those of non-mature properties both rose by 0.3% on a monthly basis. Rents for mature estates increased 17.2 percent, while non-matured rents grew 19.2 percent on an annual basis.

According to Ms Christine Sun of OrangeTee & Tie, senior vice president for research and analytics, the market’s demand is driven by foreign students, as well as foreign workers seeking affordable rental housing.

As a result of cooling measures, fewer people upgraded to private housing. The drop in housing supply can be offset by residents moving out of their rentals and into new homes.

Rents for almost all types of rooms increased month-on-month. Rents for three-roomed and four-roomed flats increased by 0.1 percent, while rents for apartments with five rooms rose 2.1%. Rents for executive apartments fell by 0.8 percent.

The rental rates of all room types increased year-on-year. Five-room apartments jumped by 21,6%, while executive apartments grew by 19,5%. Rents for four-room apartments increased 18.2 percent, and those of three-room apartments rose by 15.7%.

Rents for condos continued to drop, falling 0.5 percent from August. Rents increased by 13.9% on an annual basis.

Mark Yip, Huttons’ chief executive officer commented on the drop in rents: “Landlords were under greater pressure in September 2023 to keep tenants because there was little demand for the condos.

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OrangeTee Ms Sun was not surprised by the price correction, as she noted that rents were rising “too quickly and too high” in 2022. Tenants were unable to pay the rents and moved on in search of cheaper accommodation.

The CCR rents rose by 0.5%. Rents in the RCR fell by 0.2 percent, while rents in the OCR dropped by 1.3 percent. The CCR rents rose by 11.1%, the RCR rents by 14.9% and the OCR rents by 15.7%.