HDB flat rentals down 20.7% to 1,490 units in August

The decrease in leasing volume is a seasonal effect.

The number of rented HDB flats fell by 20.7% YoY to 1,490 units in August compared to the same month a year earlier, according to data from the SRX. On a monthly basis, volumes decreased by 22.2% MoM compared to the 1,915 units rented in July.

Also read: Condo rents up 0.8% in July

Overall, the month’s HDB rent volumes were also 16.4% lower than the five-year average volume for the month of August.

Real estate agency OrangeTee said that the decrease in volumes may be a seasonal effect, for the drop in rental volumes and leases has similarly dipped in August for the past two years--by 6.8% MoM in 2018 and 5.2% in 2017. The slow growth in the services and manufacturing sectors also weighed down on leases.

“Apart from the seasonal fall, the weakening demand could also be related to the slower-than-expected growth in the services and manufacturing sectors owing to the escalating trade tensions, and a slowdown in the economies of China and the eurozone. There could be some upward pressure on unemployment for these sectors, which may adversely impact the HDB rental market in the coming months,” commented OrangeTee.

Of the HDB flats rented during the month, 36.4% of the total rental volume comes from four room, 35.4% from three room, 22.2% from five room and 5.9% from executive, noted the SRX.

In contrast, the prices of HDB rents inched up by 0.7% YoY during the month compared to August 2018, although it decreased slightly by 0.1% MoM compared to July. SRX reported that all room types experienced YoY rent increases except for executive units, which dipped 2.2%: with rents for three rooms, four rooms and five rooms increasing by 2.1%, 0.3% and 0.6%, respectively.

Mature Estates and Non-Mature Estates rentals increased by 0.7% and 0.6% year-on-year, respectively.

Overall, HDB rents increased by 0.7% although they were down 14.6% from the peak in August 2013, according to SRX.

Meanwhile, the number of private condo rent transactions fell by 17.5% YoY to 4,306 units in August compared to the same month a year earlier.

On a monthly basis, volumes decreased 18% MoM compared to the 5,252 rentals transacted in July. Overall, August’s volumes were 1.6% lower than the 5-year average volume for the month of August.

A bulk of the total transactions (65.6%) came from units priced between $2,000 to $4,000. Meanwhile, about 9.3% came from units below $2,000, whilst 16% were from units priced between $4,001 to $6,000. Additionally, 7.7% came from the $6,001 to $10,000 submarket, and the remaining 1.4% are transactions amounting above $10,000.

On the other hand, condo rental prices edged up 3% YoY in August, and inched up by 0.2% MoM compared to July. On a YoY basis, rentals in all regions increased: CCR by 4.4%, RCR by 3.1% and OCR by 1.7%.

Similar to HDB rentals, OrangeTee said that the MoM decline in private leases during the month is consistent with what was observed over the past two years, where rental volume dipped 4.4% MoM in 2018 and 8.1% in 2017. “The slow-down is within expectation as rental volume usually reaches a peak in July before tapering off in August. Many foreign expatriates would have renewed their leases or signed new contracts by the third quarter of the year. Therefore leasing demand is expected to moderate further as the year-end approaches,” said OrangeTee.