Condo rental price decline to continue until end of H1

Landlords competing for tenants will sustain the decline in January.

Condo rental prices will continue to decline as landlords scramble to secure tenants, analysts have said.

Christine Sun, Chief Researcher & Strategist, of OrangeTee Group, said condo rental prices have declined over the past five months to a total of 3.5%

This created a domino effect. Because overall rents have been going down, landlords are now open to accepting lower rents. 

“Moreover, rental volume typically rises in December as tenants return from holidays and renew leases before the new year starts. For instance, rental volume had similarly increased in December 2022 to 6,385 units, up from 5,026 units in November 2022. Rental volume had also risen from 4,983 units in November 2021 to 7,327 units in December 2021. Demand will likely be sustained in January 2024 as tenants continue to sign new leases or renew leases at the start of the year,” Sun said.

Private real estate agency Huttons agreed with this sentiment, citing that one landlord has even agreed to lower rent by 10% from the previously contracted rent in order to secure a new tenant.

“However the supply of larger condo units is limited. Furthermore the inconvenience of sharing the bathrooms among more occupants may outweigh any potential savings in rent. Hence the lower supply of new condos in 2024 will have a more significant impact on rents. On balance, the rents of private condos may bottom in H1 2024 and stabilise in H2 2024,” Mark Yip, CEO of Huttons said.