Over the past 13 months, Singapore apartment rents have continued to decline, especially in February, dropping by 1%. This trend is mainly due to oversupply, especially as many new apartments obtained temporary occupancy permits last year, increasing the rental supply in the market.
The increase in supply has led to a decline in rental prices in some areas, with the Core Central Region (CCR) experiencing the most significant drop in rents, followed by the Rest of Central Region (RCR) and Outside Central Region (OCR). Additionally, in February, the rental volume of condominiums decreased by 21% compared to the previous month and by 7.7% year-on-year, indicating that the market is still undergoing continuous adjustments.
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Meanwhile, HDB rents saw an increase in February, reaching new historic highs. This rise reflects strong demand from tenants for more economically viable housing options, especially amidst intensifying inflation. Many tenants are turning to HDB flats to alleviate economic pressure. Due to limited new HDB flat supply, this has also somewhat driven up rents.
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Although leasing volumes in February were affected by the Lunar New Year holiday, it is expected that leasing volumes for both markets will gradually rebound over time. For the private rental market, with the gradual absorption of supply, rental prices are expected to bottom out in the first half of 2024, with the second half possibly showing a stable trend. In contrast, due to tight supply and continued demand from tenants for economically viable housing options, HDB rents will continue to rise.
This differentiated market trend reflects changes in supply and demand dynamics as well as tenants' adaptation and choices under economic pressure. Investors and tenants need to closely monitor these trends and their underlying reasons to make informed decisions. As market conditions continue to change, flexible strategy adjustments will be key to seizing opportunities and meeting challenges. In the days ahead, continuous monitoring and rational responses to Singapore's housing rental market will be crucial.
