SINGAPORE – Rents for Housing Board flats and private apartments dipped in January as more units were leased, with analysts noting that landlords have loosened their grip on asking prices.

HDB rents slid by 0.7 per cent in January, reversing the 1 per cent rise in December 2023, flash data from real estate portals Singapore Real Estate Exchange (SRX) and 99.co showed on Feb 20.

Condominium rents were down 0.7 per cent in January, led by rental falls in the suburbs and city fringe. This marks the sixth consecutive month of decline in the private rental market.

Ms Christine Sun, chief researcher and strategist at property firm OrangeTee Group, said that prices have decreased by a total of 4.3 per cent from July 2023 to January 2024, substantially wiping out the 4.9 per cent price growth in the first half of 2023.

Huttons Asia chief executive Mark Yip said: “Tenants had the upper hand in negotiations, forcing more landlords to meet their demand for lower rents.”

Compared with January 2023, condo rents were still up 0.4 per cent, with rents in the suburbs climbing by 2.4 per cent. Rents in core central Singapore and the city fringe showed a slight decrease.

ERA Singapore key executive officer Eugene Lim said that landlords have had to face higher mortgage payments and increased property tax, while rising retrenchment numbers have led to softer tenant demand, causing rents to dip.

“Some landlords would rather compromise on rents than leave their units vacant for an extended period of time,” he added.

HDB rents were 8.5 per cent higher compared with January 2023, with rents climbing across all flat types in both mature and non-mature estates. Five-room units marked the highest growth at 9.2 per cent.

Mr Yip said the price decline in January 2024 may be temporary as demand remains firm year on year.

“The HDB rental market continues to attract tenants looking for affordable accommodation,” he said. But he noted that if condo rents dip further, some tenants in HDB flats may choose to rent a condo instead, which could cause HDB rents to fall.

Still, Mr Lim expects the HDB rental market to remain resilient in 2024, owing to the limited supply of rental units, particularly in mature estates.

He said HDB executive flats in the mature town of Clementi recorded the biggest median price increase, from $2,750 in December 2023 to $4,300 in January 2024.

Condo rental volume rose 6.2 per cent to an estimated 6,016 units in January. But the number of units leased was down by 4.6 per cent year on year, and was 13 per cent lower than the five-year average for the month of January.

More HDB flats were also leased in January, inching up by 4.6 per cent to an estimated 3,024 units.

Rental volumes in the HDB market were up 5.3 per cent year on year, and were 1.4 per cent higher than the five-year average for the month of January.

Ms Sun said more tenants returned to both HDB and private rental markets after the year-end festivities, and rushed to sign leases or renew existing ones before the Chinese New Year holidays.

On Jan 22, changes to the rental occupancy cap for larger HDB flats and private homes kicked in, allowing owners of four-room or larger flats and private homes of at least 90 sq m to house up to eight unrelated people, up from the previous cap of six.

Mr Yip said the impact of the temporary measure, which will be in place until end-2026, could be muted as the supply of larger units is limited.

Property analysts also said the voucher under the Parenthood Provisional Housing Scheme (PPHS), which would help eligible families waiting for their Build-To-Order units offset rents for an HDB flat on the open market, is unlikely to cause rents to rise.

The voucher, which will be available for a year, was announced during Budget 2024. Details have yet to be announced.

The PPHS provides interim rental housing for families that have a monthly household income of $7,000 or below and an uncompleted flat from HDB’s sales exercises.

Ms Sun said: “Even if prices were to rise, it would probably affect smaller HDB flats, as most couples taking up this scheme would usually not lease bigger flats due to cost concerns.”