HDB rents 'may reach peak soon': OrangeTee

Rents for condominiums rose by 11.8% year-on-year last month.

Real estate company OrangeTee, regarding the SRX Flash Report for February 2022, said HDB rents may reach a peak soon since it has been rising more than 1% over the past three months. The current rent price was also 0.6% away from the August 2013 peak.

According to SRX data, the cost of renting a place has risen by double digits over the past year. Rents for condominiums rose by 11.8% year-on-year last month, while HDB rentals increased by 12.4% over the same period. Last month, the condominium rental index rose for the 14th consecutive month while the HDB rental index climbed for 20 straight months.

OrangeTee said a few forces may be driving rents higher, such as shrinking rental stock and lack of new supply. Many owners of private homes and HDB flats have been selling their units since resale prices have been rising over the past few months. New completions are also not meeting the demand for housing.

Inflation and rising costs, such as higher maintenance charges, climbing interest rates, higher property taxes, may also have a snowball effect on rents, as landlords pass on the costs to their tenants. Therefore, OrangeTee concluded rents may continue to climb if inflationary pressures continue to escalate in the coming months.