Condo and HDB rental volumes rise in November: SRX

[SINGAPORE] More people rented condominium units and Housing Board (HDB) flats in November, even with border restrictions still in place.

The rental volume for condominiums rose 3.8 per cent month on month to an estimated 4,443 units in November from 4,281 units in October, according to flash data from real estate portal SRX Property released on Wednesday. Year on year, private leasings are 1.1 per cent higher than in November 2019, before the Covid-19 onset.

HDB rental volume climbed 6.7 per cent month on month to an estimated 1,762 flats in November, compared to 1,652 flats in October. Year on year, HDB leasings are down by 11.7 per cent from November 2019.

ERA Realty's head of research and consultancy Nicholas Mak said while the month-on-month increase in leasing volume "may appear surprising", as a major source of residential leasing demand are foreigners, a group of new tenants could be newly married young couples.

"These young families could wish to live independently, while waiting for their permanent new homes, such as HDB flats or executive condominiums to be completed, and may rent HDB flats or private condominiums (in the interim), depending on their housing budgets," he said.

However, he noted that the increase in leasing volume is "marginal" with mixed impact on the rental index as HDB housing rental index remained unchanged while the rental index for private apartments increased 0.4 per cent month on month.

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Overall rents for condo units in November edged up by 0.5 per cent from the month before, climbing for the fifth consecutive month. Year on year, rents are still down by 0.6 per cent from November 2019.

Rents in the rest of central region (RCR) and outside central region (OCR) increased by 1.6 per cent and 0.2 per cent month on month respectively, while those in core central region (CCR) decreased by 0.4 per cent.

Overall rents for HDB flats in November remained unchanged from the month before. But compared to a year ago, they are up by 0.8 per cent.

Rents in the mature estates decreased by 0.4 per cent while those in the non-mature estate increased by 0.6 per cent.

Four-room, five-room and executive flat rents rose by 0.1 per cent, 0.4 per cent and 0.8 per cent respectively, while three-room flat rents decreased by 0.3 per cent.

Rents are down 13.7 per cent from their peak in August 2013, according to the SRX data.

Mr Mak said he expects the Singapore housing market to get a "shot in the arm" next year as the government rolls out the Covid-19 vaccination programme and gradually eases the border restrictions.

"More foreigners are expected to return to Singapore next year, and one of the beneficiaries will be the residential leasing market," he said.

Christine Sun, head of research and consultancy at OrangeTee & Tie, said that one sector that may ramp up their employment of foreign professionals with niche skills is the digital financial sector, as the Monetary Authority of Singapore recently awarded four new digital full bank licences.

"These highly skilled workers, who will probably command higher incomes or housing budgets, will likely benefit the middle to upper tier of the rental market such as private homes in the luxury and city fringe areas," she said.

But she forecasts that overall rental volume next year may decline by 5 to 8 per cent and rents may fall up to 4 per cent as more homes are completed amid macroeconomic uncertainties.

THE STRAITS TIMES