HDB, condo rents rise in August but volumes fail to match estimates: analysts

Domestic demand is propping up the leasing market, especially HDB upgraders.

August saw the HDB rents and condo rents continue to climb compared to a year earlier, according to the latest data released by SRX and 99.co.

Compared to the same month last year, condo rents rose 7.6% in August whilst HDB rents increased by 8.6%.

“Rental demand for both the HDB and private markets rebounded last month after tenants returned to the market after viewing restrictions were eased—from a cap of two distinct visitors per household per day to five persons after 10 August 2021,” said Christine Sun, Senior Vice President of Research & Analytics for OrangeTee&Tie.

Condo rents in the Core Central Region (CCR), Rest of Central Region (RCR), and Outside of the Central Region (OCR) jumped by 6.2%, 7.1%, and 8.8%, respectively. 

Year-on-year, condo rental volumes are 2.1% higher than in August 2020. Volumes are also 0.9% higher than the five-year average volume for the month of August.

By region, in August 2021, 38.3% of the volumes were from OCR, 32.2% from RCR and 29.5% from CCR.

Compared to the month of July, overall condo rents stayed flat in August, despite the fact that more units were moved during the month. Rents in the CCR and RCR decreased by 0.2% and 1.2%, respectively. This is offset by condo rentals in OCR rising by 1%.

An estimated 4,907 condo units were rented out in August, 6.6% higher than the previous months. Despite this, the total volume is reportedly lower than the estimate given in last month's flash report, SRX and 99.co said.

Domestic demand is reportedly propping up the leasing market. OrangeTee&Tie’s Sun shared that they have observed more locals renting, particularly HDB upgraders who have recently sold their homes. 

Others are also leasing temporarily as the construction of their new homes have been delayed.

Moving on to the HDB rental market, August saw all room types record rent increases: 3 Room by 7%, 4 Room by 9.4%, 5 Room by 9.8%, and Executive rents by 6.4%.

Compared to July, however, overall HDB rents remained mostly flattish with a 0.3% rise. Rents for 3 Room (0.1%), 4 Room (0.8%), and 5 Room (0.2%) units rose, whilst executive rents decreased, dropping by 0.5%. 

“Hence, rents of more affordable housing units like the private homes in the OCR and HDB flats continue to rise last month. Further, there were more tenants who were students or PRs who had just returned from overseas,” Sun said. 

Volume-wise, the trend of HDB rents moved to the same tune as those for condo rents: the number of units rented increased from July’s numbers but failed to meet earlier estimates by SRX and 99.co. 

An estimated 1,842 HDB flats were rented in August, 5.7% higher than in August 2020 and a 6% rise compared to in July 2021. By room types, 34% of the total volumes are from 4 Room, 37.5% from 3 Room, 23.6% from 5 Room, and 4.9% from Executive.

HDB rent volumes are also 1.1% higher than the 5-year average volume for the month of August.