Rents on HDB flats fell for the first month since January, as tenants turned their attention to the condo market which is continuing to drop.
Flash estimates published by SRX and 99.co on Friday (Jun 21) showed that HDB rents retreated 0.3 per cent month on month, but were still 6.2 percent higher year on year.
Market watchers attribute the decrease in rents due to a decrease in demand on both markets because of the weaker job market.
The weaker job market has also prompted many young Singaporeans to either delay their plans to leave their parents’ home to rent their own place or to surrender their apartment rental and return to live with their parents.
The market for employment continued to be a bit soft for certain industries such as IT, which has affected the amount of employment pass (EP) holders as well as the demand for condos.
The continuous tightening of the standards to qualify for an S Pass is leading to less S Pass holders. However condominium tenants searching for an HDB flat to rent.
Rents are on the decline, but this could be good for companies looking to expand their workforce in the future, as costs for accommodation for expats are becoming more affordable.
The market for condominium rentals declined for the second straight month decreasing 0.5 percent over the month that began in April.
Condo rents fell 4.5 percent when compared to the same time the year before.
Both markets experienced a decrease in leasing volume which is why rents decreased in both markets.
HDB rental volumes dropped 13.2 per cent to 2,558 units during May down from 2,946 units recorded in April. The volume was down 12.3 percent from the previous year and 8 percent lower than the average of five-year volumes in May.
In May, HDB rental volume was 38.1 percent for apartments with four rooms, then 35.4 percent for three-room units, 22.4% for five-room apartment, and 4.5 percent for executive apartments.
The rents for five-room apartments were up by 0.8 percent in May when compared to the month before. Other room types saw a decline.
The three-room flat rental rate recorded the largest decrease in month-to-month terms of 0.7 percent. Then came rents for four-room flats (-0.5 percent) and executive flat rents (-0.4 per cent).
Rents for mature estates fell 0.8 percent from April, and that for non-mature estate rose 0.5 percent. Rents for non-mature and mature properties rose by 5.9 and 6.9 percent respectively.
The less demand for HDBs could also be seasonal, as tenants and landlords travelled abroad prior to the June holiday and this led to less rental activity.
The rental activity may resurface after the vacation period has ended.
The number of condos rented dropped by 12.2% in one month, reaching 5,155 units, a drop from 5,874 units in April. Year-on-year, rental volumes were 0.4 percent lower, and 5.7 per cent lower than the five-year average for May.
Leasing volume in the Outside Central Region (OCR) was slightly higher than other regions in the Outside Central Region (OCR), accounting for 35.5 percent of all transactions during May. The Rest of Central Region contributed 33.5%, followed by the Core Central Region (30.9%).
The three regions all saw a decrease in rents over the course of a month, with the RCR showing the biggest drop in rents, which was 1.1 percent. Rents in the CCR fell 0.2 percent, while rents in the OCR dropped 0.7 per cent.
CCR rents fell by 3.7 percent on an annual basis, and RCR and OCR rentals each dropped by 4.9%.