Rents for private condos could be affected by more pressures in H2 of 2024

Private home owners may not be as fortunate as HDB flat landlords.

According to SRX and figures released earlier in the month, the rental index for non-landed private housing fell in February due to a glut of supply last year. The index fell by 1 percent from January, marking a net-negative growth for 13 consecutive months.

The rental price index of HDB flats, however, grew by 1 percent to reach a record high of 137.5 in the last month. Both HDB and condominium rental volumes declined in February, mostly due to Chinese New Year celebrations.

Analysts expect that the HDB rental market will continue to grow, but the private market could take longer to recover. ERA predicts that private home rents will fall by 5 percent in 2024. However, HDB flat rentals are expected to increase 10 percent this year.


Rents for private homes are expected to remain low due to the recent rise in new construction and affordability concerns.

In 2023, 19,968 residential units were completed (excluding executive condos). This is a significant increase over the 9,526 completed units in 2022. It also represents the highest completion rate of private residential properties (excluding executive condominiums or ECs) for the year since 2016.

Even so, the completion of new homes for private residences is still slowing down.

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In 2024, it is anticipated that the supply of private housing will decrease, with almost 10,000 new homes scheduled to be completed. In 2025, the number of completed units will fall to 5,500.

Rents could be at their lowest point this year as the competition for tenants eases in the second half of 2018 or 2019.

This year, HDB flats will have reached the minimum five-year occupation period (MOP), a 23.1 percent lower figure than in 2023.


The rents of HDB flats may rise up to 8 percent this year due to a lower supply and the demand for more affordable housing.

Renters on a stricter budget are usually a mixture of foreigners, such as holders of Employment Passes, and locals. This includes families who have to wait for the completion or their new Build-To Order homes, or former home owners waiting out the 15 month waiting period.

Some of the leasing demand for HDB flats could have been a result of the sharper rise in private home rental in recent years.

Around 90 percent of foreign workers in Singapore don’t receive housing allowances from their employers.

He added that when these tenants look for a place to rent, they’ll be looking for an apartment that costs between 30 and 50 percent of their monthly income.

Some tenants who live in condos of mid-size may be moving up to HDB flats.

She added that some tenants prefer to rent centrally located, newer flats, which are just reaching their MOP. They prioritize convenience and affordability above condo facilities.

The difference in rental for a similar HDB flat of 1,000 square feet (sq ft), compared to a condo could range from 6.3% to 29.4% within the same area.

HDB towns that have completed more private projects are experiencing a smaller gap between HDB and condominium rentals.

In March 2023 the gap (rental) between a three-bedroom unit in Alps Residences Condo (S$5,000), and a four room HDB flat at Tampines West ($3,700), was S$1,300. Today, the gap is S$1,000.

Four-room HDB flats is the most common configuration among tenants. Two-bedroom private condos are also popular.

Lease Terms

The average lease term for renting a unit is two years, whether it’s HDB or privately owned. Most units are furnished.

The majority of tenants now prefer a one-year contract, as they believe that rental rates may decrease in the future. They also think that they can renew their lease or rent another property for a better rate.

Landlords prefer tenants to sign a 2-year lease in order to be at ease. We have seen tenants who are interested in a six-month lease. Some landlords will accept a 6-month lease depending on their mindset and the length of time the unit was vacant.

We don’t see landlords offering extras for free or renovating their units to attract tenants. These extras can help you to find a tenant faster, but they may not help to get a better rental price, since the prices of rentals are heavily influenced by the recent transactions in your area.

It is not easy to find tenants for newly finished private condo developments. The main factors are the location and the competition in the area.

Mega-projects tend to have a high market share in terms of rental activity. As an example, at the 2,203-unit Treasure in Tampines there were 62 rentals contracts, which accounted for one third of all rental activity within the Tampines planning zone.

Parc Clematis, with its 1,468 apartments, had 49 rental agreements, which accounted for 30% of the rental activity within the Clementi area.

The larger units between 900 sq ft and 1,000 sq ft within mega projects tend to command a higher rent than the average monthly rent in their planning area.

These units are larger than newly finished units and are therefore still in high demand.

It may take longer for older, less well-maintained units to be leased out. They may remain on the market for over six months without much response.

Rents are different between older and newer homes. The rent for a three-bedroom unit in Amber Skye, which was completed in 2017, was S$5,800. A similar unit in Coastline Residences, which is due to be completed in 2023, could fetch S$6,800 per month. This shows that tenants prefer newer developments.

Although some landlords may have difficulty leasing out their units to tenants, they generally invested some time and effort into purchasing their investment property, so are less inclined to sell it.

Owners who bought their property before the Additional Buyer’s stamp duty was introduced or when it was lower may not want to sell so easily.

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