HDB rents up 20.8% in August

The rents of HDB flats are expected to consolidate for the rest of 2023.

HDB rents rose 20.8% in August compared to a year ago and remained the same on average compared to July, the latest data from 99-SRX showed.

Compared to July, the rents of 3 Room and 5 Room units rose by 0.7% and 0.5%, respectively. This was offset by 4 Room and executive rents falling by 0.3% and 1.5%, respectively. 

Compared to a year ago, all room types recorded rent increases. 3 Room rents were higher by 18.6%, 4 Room by 21%, 5 Room by 22.6%, and executive rents saw the largest rise with a 23.4% increase.

An estimated 2,997 HDB flats were rented out in August, a 10.1% decrease from the 3,334 units rented out in July. However, the volumes were 16.9% higher than in August 2022, and 11% higher than the 5-year average volumes for the month of August.

Breaking it down by room type, in August 2023, 32.3% of the total volumes are from 3 Room, 37.7% from 4 Room, 24.1% from 5 Room and 5.9% from Executive.

The rents of HDB flats are expected to consolidate in the rest of 2023, following the same trend as condo rents.

ALSO READ: New launches dampen condo rent volumes in August

“Rents of HDB flats in August grew at its slowest pace since October 2021, an early sign of a slowdown in the HDB market,” said Huttons CEO Mark Yip.

He noted that HDB upgraders have moved into their newly completed homes and did not renew their lease for HDB flats. 

“At the same time, there were less launches in August 2023 due to the lunar seventh month and thus less demand from HDB upgraders who will sell and rent so as not to pay the ABSD,” Yip noted.

With condos such as Normanton Park, The M and The Florence Residences completed recently, and more condos are expected to be completed in the next few months, there is little incremental demand to absorb the supply of newly completed condos.

“Hence rents of private condos and HDB flats are estimated to consolidate for the rest of 2023,” Yip said.
However, HDB rents are still expected to outperform the private rental market in the short term.

“Despite the rising rental prices, there will always be demand for HDB flats as they offer the most affordable rents. Therefore, the HDB rental market may continue to outperform the private market for a while,” said Christine Sun, senior vice president of research and analytics, OrangeTee & Tie.