HDB rental market will continue to grow; private condo rentals may experience more challenges in H2 2020


HDB flat rents may increase up to 8% this year, due to lower new supply and tenants searching for affordable housing options. Private housing rents remain high for many.

Tenants on a lower budget usually include a mixture foreigners (such a Employment Pass holders), and locals. They may be families waiting to have their Build-ToOrder or newly built homes completed, or they could be former private homeowners who are serving the 15-month-waiting period.

A greater demand for HDB rentals could have resulted from the higher increase in private home rental rates in previous year.

90% of the foreign workers in Singapore are not entitled to any housing allowance.

The renters will be looking at places that cost less than 30% to no more than 50% of their monthly earnings, said the expert.

This could be because some tenants are moving from mid-sized condos into larger HDB flats.

Some tenants are more interested in renting newer, centrally-located flats just past their MOP because they prefer convenience and affordability to condo facilities.

The difference between the rental of a HDB apartment measuring 1,000 square feet and that of a condominium unit can range from 6.3 to 29.4 % within a given location.

HDB Towns with more completed private projects will see a smaller difference in price between HDB & condo rentals.

In March of 2023, the difference in rent between a comparable three-bedroom condo unit at Alps Residences ($5,000) and a 4-room HDB flat located in Tampines West (“S$3,700”) was S$1,300. The gap today amounts to S$1,000.

The most common flat configuration is a four-room HDB unit, while private condos tend to have two-bedroom units.

the chuan park showflat

It may be a good time for HDB flats but not for private homes.

According to SRX’s and 99.co’s figures, released earlier this year, the rental price index in the non landed private housing market dropped in February. This was due to a gluttony of supplies last winter. The index dropped by 1% in January, marking the 13th consecutive month of net negative growth.

In contrast, the HDB rental price index grew by 1% to a new record of 137.5. In February, both HDB rentals and condo rental volume declined due to Chinese new year celebrations.

Analysts believe that HDB will continue its rapid growth while the private sector may need more time to recover. ERA expects private home rental prices to drop by 5 percent by 2024. HDB flat rents are forecast to grow 10 percent in 2019.


A subdued outlook on private home rentals is due to the recent increase in completions of new homes as well as affordability issues.

In 2023 there were a total of 19,968 units completed in the private residential sector (excluding executive apartments or ECs). This number surpasses that of the 9,526 residential units completed in 2022 and is the highest annual completion rate (excluding ECs), for private residences, since 2016.

The completion of private homes continues to slow down.

By 2024 the private housing supply will be reduced, and nearly 10,000 homes will be finished. The number of homes completed in 2025 will be even lower, at 5,500.

Rents are likely to be lower this year than they were last year.

The number of HDB flats that will meet the 5-year minimum occupancy period (MOP), estimated at 11,952 this year is 23.1 per cent less than 2023.

Lease Terms

Renting a HDB or private unit usually requires a two-year lease. In general, most units come furnished.

In the hope that future rents will be more affordable, tenants opt for one-year contracts.

The landlords prefer to have tenants sign a lease for two years. This gives them some peace of mind. It is true that we have seen situations where tenants wanted to lease for a period of six months. Depending upon the landlord’s attitude and how long a unit has been vacant, some landlords may be flexible and accept a six month lease.

In general, landlords aren’t offering freebies and renovating their apartment to attract tenants. Although these extras will help attract tenants more quickly, they won’t necessarily result in higher rental rates, as the price of a unit is largely determined by recent sales.

There is a lot of competition for the newly-completed private condo projects. But it comes down to the location, the supply and demand in the surrounding area, as well the actual development itself.

Mega-projects have a strong rental market share. At the 2,203 unit Treasure at Tampines project, there were six rental contracts that accounted for a quarter of rental activity across the entire Tampines Planning Area.

Parc Clematis had 1,468 apartment units and 49 rental contracts. This project accounted for 30 per cent rental activity of the Clementi planning zone.

In mega projects, larger units ranging between 900 and 1000 sq ft tend to fetch higher monthly rents than their planning areas.

Older units still have a demand because they are larger than newer units.

These older units, which are often not well maintained, may take a little longer to rent out. The units that are not well maintained may take longer to lease out.

The disparity between rents of new and older houses. A three-bedroom apartment at Amber Skye completed in 2017 was rented last month for S$5,800. In contrast, an identical-sized unit at Coastline Residences finished in 2023, could be rented for S$6,800. These figures highlight tenants’ preference to newer developments.

While some owners might have difficulties leasing out their property, landlords are generally not inclined to dispose of their properties because they’ve invested in them.

The owners of investment properties may be reluctant to sell because they bought their property at a time when the Additional buyer’s stamp duty was lower or had not been introduced.

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