In 2023, the Singaporean economy was affected by the global economic slowdown and geopolitical tensions, leading to a deceleration in economic growth. This resulted in a slowdown in the growth of Employment Pass (EP) holders, leading to a decreased demand for new tenants in private residences.

Additionally, the sharp increase in rental prices in 2022 led some tenants to choose shared living spaces or HDB flats, further reducing the demand for private residences.

Furthermore, the completion of private residential units in 2023 surged, exceeding 15,000, with an additional 3,167 units planned to be completed in the fourth quarter of 2023. This resulted in the supply of private residences reaching its highest level since 2016.

Some large projects such as Affinity At Serangoon, Avenue South Residences, Normanton Park, Riverfront Residences, The Florence Residences, and Treasure At Tampines contributed to half of the newly built private residences in 2023.

However, the increase in supply sharply contrasts with the slowdown in demand. The rental growth rate in the third quarter of 2023 was only 0.8%, and the expected rental growth for the entire year of 2023 is 10%, much lower than the 29.7% in 2022. This indicates that the growth in the rental market has stabilized.

Looking ahead to 2024, it is foreseeable that the addition of housing supply will decrease. The expected completion of new private residences and HDB flats in 2024 is anticipated to be lower than in 2023. This might mean that the growth rate of demand for HDB rentals will be relatively smaller.

The economic outlook for 2024 is relatively optimistic, with the possibility of more new EP holders. Additionally, the market may be supported by foreigners, as they typically rent before purchasing property. If interest rates decrease in 2024, landlords may alleviate the burden of high mortgage loans.

However, it should be noted that the market may need at least six months to absorb the large number of private residences completed in 2023. Therefore, rental prices in the first half of 2024 may face downward pressure. However, it is expected that in the second half of 2024, the rental market will gradually stabilize.

Regarding HDB rental prices, there were signs of stability in 2023. It is expected that HDB rental prices will grow by 12% in 2023, a decrease from the 28.5% growth in the previous year. By 2024, the completion of new private residences and HDB flats is expected to decrease, which may exert some upward pressure on HDB rental prices. Huttons Analytics estimates that HDB rental prices will increase by 5% to 8% in 2024.