Demand for affordability is keeping HDB rental prices in check

Rents may have edged up in December but will still likely stabilised, analysts said.

HDB rental prices are holding as affordability remains a key concern for tenants in 2024.

Christine Sun, Chief Researcher & Strategist at OrangeTee Group, said that rental stock is expected to continue to decline, given the reduced number of Minimum Occupation Period (MOP) flats. 

“Specifically, MOP flats will decrease from 15,748 units in 2023 to 13,093 units in 2024. HDB rental prices are anticipated to stabilise in 2024, with a slight gain of 1% to 3%. We do not expect a jump in rental growth despite a tighter housing market since affordability will remain a key concern amongst tenants,” Sun said.

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This sentiment is echoed by Mark Yip, CEO of Huttons. Yip said because of this, there is a risk that rents might experience a sudden spike and affect Singapore's competitiveness. Hence the temporary relaxation in occupancy cap for larger HDB and private homes is to allow supply to gradually catch up. 

“Similarly in the HDB market, HDB has not been building many larger flats in many years. It is unlikely that the market will see a sizeable supply of larger flats for rent in 2024. The impact of this policy change is likely to be limited. Rents of HDB flats may increase up to 8% in 2024,” Yip added.