Rents for HDB flats dropped in the first month since January, as tenants turned their focus towards the market for condos which is continuing to decline.
Flash estimates published on 21 June, by SRX and 99.co revealed that HDB rentals were down 0.3 percent from month to month, but still 6.2 percent more than year-over-year.
Market observers attribute the decline in rents to a lower demand in both markets due to the weaker job market.
A few young Singaporeans are also being enticed by the sluggish job market to hold off leaving their parents’ home and obtaining their own home or returning to their parents ‘ homes to stay.
The number of Employment Pass (EP) holders has decreased, while demand for condos has increased.
S Pass holders are decreasing because the requirements for getting the S Pass continue to tighten. Also, there were less HDB tenants looking to lease HDB flats.
Rents are decreasing however this could be good for companies looking to increase their staffing levels in the future, as costs for accommodation for expats are becoming more affordable.
The prices for condominiums on the market have been falling for the second month in a row. They’re lower by 0.5 percent compared to the month before.
Rents for condos dropped 4.5 percent when compared to the same time the previous year.
Both markets experienced a decrease in the volume of leasing and that is the reason rents decreased in both markets.
HDB rental volumes fell 13.2 percent, to 2,558 units, down from 2,946 units in April. The volume was lower by 12.3 percent year-on-year, and were 8 percent lower than the average volume of five years in May.
In May, HDB rental volume was 38.1 percent for apartments with four rooms, then 35.4 percent for three-room apartments, 22.4% for five-room apartment, and 4.5 percent for executive apartment.
The rents for five-room apartments increased by 0.8 percent in May, compared to the month before. Room types other than five were down.
The most dramatic drop in rent was seen in three-room flats that fell 0.7 percent between month and month. The rent for a four-room apartment (down by -0.5 percent) and the executive rents for apartments (down by -0.4 percent) were next.
Rents for the mature estate decreased by 0.8 percent since April. Non-mature estate rents increased by 0.5 percent. Rents for non-mature and mature properties rose by 5.9 and 6.9 percent, respectively.
Rents could have dropped due to less HDBs being rented particularly if landlords and tenants are travelling abroad in the time prior to the holiday in June.
Rents can increase following vacations.
The number of condos rented dropped by 12.2 percent in a single month, reaching 5,155 units, a drop from 5,874 units in April. The rental volume in May was lower by 5.7 percent when compared to the average of the past five years.
The Outside Central Region (OCR) was responsible for 35,5 percent of all transactions in May it was only slightly ahead of the other regions. The Rest of Central Region contributed 33.5 percent and was followed by the Core Central Region (30.9%).
Rents across the three regions all fell month-on-month however the RCR had the largest decrease, which was 1.1 percent. Rents dropped by 0.2 percent in the CCR as well as in the OCR, by 0.7 percent in the OCR.
CCR rents decreased by 3.7 percent annually, and RCR and OCR rental rates each fell by 4.9 percent.