Several new homes in 2023 may not be for rent: Huttons

This as tenants’ budgets are affected by cost pressures.

In its outlook for next year, Huttons Asia said the rental market will not be immediately relieved by the newly completed units in the private home market.

It said the completions are only for Outside of Central Region and Rest of Central Region wherein homes are purchased for owner occupation and not for investment. This means not many new houses are put up for rent.

“Yet at the same time, demand may flow to the RCR and OCR as tenants’ budgets get squeezed,” Huttons added.

The Central Business District is less relevant as more firms allow hybrid work. The cooling measures on 30 September are likely to force some former private property owners to rent whilst they wait out a 15-month period to purchase a HDB resale flat.

Due to slower economic conditions and rising tax, rents in 2023 are projected to rise at a slower clip of between 10% and  15%.

HDB

With more HDB flats and private homes to be completed next year, owners will move to a new place and release flats for lease, Huttons said.

The recent cooling measures may also uplift the HDB rental market if ex-private property owners rent a HDB flat and wait out a 15-month period to purchase a HDB resale flat.

“The interplay of more supply and robust demand may mean that HDB rents in 2023 are likely to increase  by between 10% and 15%, slower than 2022’s increase,” said Huttons.