HDB, condo rental volumes rebound in September

Demand for HDB rental units may have risen rose as employers move workers out of dorms.

HDB and condo rental volumes rebounded strongly in September after two consecutive months of decline as employers move workers out of dormitories and as more tenants seek cheaper accommodation.

A total of 4,252 condo units were rented during the month, up 49.9% MoM from the 2,852 units moved in August. Despite this recovery, rental volumes were still down 8% YoY compared to September 2019.

Condo rental prices edged up 0.2% MoM in September compared to the previous month, with OCR rents up by 1.2% whilst CCR and RCR rents fell by 0.3% and 0.8% respectively. However, compared to September 2019, overall rents slipped 0.4% YoY.

In the HDB rental space, volumes increased 49.7% MoM with 1,611 HDB flats moved in September from 1,076 units rented in August. September rent prices rose by 0.4% compared to the previous month, with Mature Estates rents increasing by 0.8% whilst Non-Mature Estates rents remaining flat. 3-Room, 4-Room and 5- Room rents also rose by 0.9%, 0.2% and 0.3% respectively compare to August, whilst Executive rents decreased by 0.9% MoM.

Compared to a year ago, HDB rental volumes are down 20.7% whilst overall rent prices rose 0.4%.

There has been a notable increase in rental demand for HDB resale flats from non-construction companies, notes Christine Sun, head of research & consultancy, OrangeTee&Tie.

“Some employers have been actively relocating their workers from dormitories to prevent their workers from being infected with the coronavirus and avoid the hassle of observing stringent regulations imposed in some dormitories,” she said.

There is also a growing number of tenants opting for shorter leases, with many intending to moving elsewhere if they manage to find cheaper accommodation.

As leases are now shorter, there will be more transactions recorded over time, according to Sun. 

She added that there also seem to be more Singaporeans renting homes near popular schools for the primary one registration exercise in recent months. This may be due to tenants deciding that it is more prudent and cheaper to rent a unit instead of buying one in the current economic downturn.

Overall, the leasing market is expected to remain soft with some rental price weakness in the coming months, in light of weak employment climate and travel restrictions, Sun concluded.