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Rents for private homes, HDB flats hit all-time highs in Q3: URA, HDB data

SINGAPORE – Rents for both private and public housing continued climbing in the third quarter of 2022 to hit all-time highs, with private home rents rising 8.6 per cent, according to government housing data released on Friday (Oct 28).

The Government unveiled a tranche of property cooling measures in September, including a 15-month waiting period for private home owners who wish to buy resale public flats.

The Government unveiled a tranche of property cooling measures in September, including a 15-month waiting period for private home owners who wish to buy resale public flats.

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  • URA and HDB released real estate data for the third quarter of 2022
  • Rents for private homes went up 8.6 per cent in the latest quarter, the steepest pace of increase since 2007
  • Demand for renting private condos is still strong with a 20.5 per cent increase in rent transactions
  • For HDB flats, rents have gone up as well, with 5-room units in Queenstown now fetching a median monthly rent of S$3,600
  • HDB continued to approve fewer rental applications, with a 12 per cent drop in cases in the third quarter 

SINGAPORE — Rents for both private and public housing continued climbing in the third quarter of 2022 to hit all-time highs, with private home rents rising 8.6 per cent, based on government housing data released on Friday (Oct 28).

This is a sharper increase than the 6.7 per cent rise recorded in the previous quarter and the steepest quarterly rental increase since the third quarter of 2007, when private residential rents rose 11.4 per cent.

Giving a breakdown of the data, the Urban Redevelopment Authority (URA) said that rents for landed homes rose the fastest, going up by 10.9 per cent in the July to September period, compared with the 3.2 per cent increase in the previous quarter. 

Excluding executive condominiums, the rates for condominiums in the core central region climbed by 7 per cent in the latest quarter, whereas those in the rest of central region and the outside central region rose 9.6 per cent and 8.8 per cent respectively. 

URA rental index of private residential properties reached 137.9, the highest point on record. The index takes reference from rents in the first quarter of 2009, when private residential rent is assigned 100 on the index.

As for Housing and Development Board (HDB) flats, rents were also higher in the third quarter of this year. 

The median monthly rate for renting a five-room HDB flat in Queenstown, for example, is now at S$3,600, a S$400 increase from S$3,200 in the previous quarter, HDB said in a separate statement.

Data from the SRX Rental Index, which tracks public housing rental, showed that the cost of renting an HDB flat at the end of September is at a record high. HDB rents went up 20.9 per cent in the first nine months of this year.

The quarterly data by URA and HDB covers the period before a swathe of cooling measures by the Government took effect on Sept 30.

The measures included imposing loan limits to moderate demand in the HDB resale market amid rising interest rates and a new 15-month wait-out period targeting private property owners looking to downgrade to an HDB flat.

Experts had said that the new wait-out period could push up rents.

STRONG RENTAL DEMAND FOR PRIVATE HOMES

Rental transactions for private homes are also up by double-digit percentage points, indicating that demand is still strong.

According to URA data, volume of transactions grew by 20.5 per cent in the third quarter to hit 25,382, up from 21,068 units in the second quarter.

As for the HDB rental market, there were fewer approved applications to rent out HDB flats in the third quarter with approved applications falling by 12 per cent from 9,309 units in the second quarter to 8,192 units in the latest quarter.

This is the third decline of approved applications in consecutive quarters, said HDB. 

Compared with the third quarter in 2021, when 10,417 units were approved for rent, rental volume in the same period this year fell 21.4 per cent.

As of the end of September, there were 56,372 HDB flats being rented out, a slight increase of 0.6 per cent over the 56,014 units in June. As a net figure, this statistic takes into account the number of people who have stopped renting.

CONDO PRICES INCREASE MARGINALLY

Overall, prices of private residential properties increased by 3.8 per cent from July to September, slightly higher than the 3.5 per cent increase in the previous quarter, URA said.

  • Prices of landed properties increased by 1.6 per cent in the third quarter of 2022, moderating from the 2.9 per cent increase in the previous quarter. 
  • Prices of non-landed properties went up by 4.4 per cent, compared with the 3.6 per cent increase in the previous quarter.
  • The pace of price increase in the latest quarter was fastest for condos outside the central region, which rose by 7.5 per cent. 
  • Condos in the core central region and the rest of central region rose by 2.3 per cent and 2.8 per cent respectively.
  • In the third quarter, developers launched 1,455 private homes (excluding executive condominiums), fewer than the 1,956 units in the second quarter. They also sold fewer private residences: 2,187 in the third quarter compared with 2,397 in the previous quarter.
  • There were 3,719 resale transactions in the latest quarter, compared with the 4,236 units transacted in the previous quarter.
  • Resale transactions accounted for 60.5 per cent of all sale transactions in the third quarter, which is lower than the 62.2 per cent in the second quarter.

HDB RESALE PRICES UP, THOUGH AT SLOWER PACE

  • Resale prices for HDB homes went up 2.6 per cent in the third quarter, slower than the 2.8 per cent increase in the previous quarter, according to HDB’s Resale Price Index, which reflects the general price movements in the resale market.
  • There were 7,546 resale transactions for public flats in the third quarter, which is a 10.7 per cent increase compared with the 6,819 deals in the second quarter.
  • HDB resale transactions in the third quarter were 10.5 per cent lower in 2022 than 2021.

RENTAL SURGE EXPECTED TO PERSIST: EXPERTS

Property watchers attributed the reasons for the surge in rental rates to the return of foreign students and expatriates. 

They added that construction delays of new private and public homes by the Covid-19 pandemic which caused more homebuyers to look towards the rental market had also increased rental demand.

At the same time, expectations of further interest rate hikes have led to landlords raising their rents as they anticipate higher mortgage repayments, said experts.

Ms Christine Sun, OrangeTee & Tie's senior vice-president of research and analytics, said: "With higher property taxes and possibly higher costs of living next year, we may expect landlords to raise rents further.

"Moreover, the 15-month wait-out period for private homeowners purchasing HDB resale flats may lead to more people renting in the interim. The increased demand will inevitably drive rents higher next year."

Mr Lee Sze Teck, senior director of research at Huttons Asia, noted that the return of foreign students and sustained hiring of expatriates are pushing up demand for homes, but the rising rents have exceeded some of their budgets and caused a “musical chairs” movement of tenants.

"Some of them have moved from the core central region to the rest of central region, while (others) have moved from the rest of central region to the outside central region," he said.

This is likely why rents in both the rest of central region and outside central region have risen at the quickest pace since 2007, he added.

Mr Lam Chern Woon, head of research and consulting at real estate firm Edmund Tie, said that while private home rents may continue to grow next year, they may move at a more moderate pace as the backlog of completion delays clears.

The number of completed private homes is expected to double from about 8,400 units in 2022 to more than 18,200 units in 2023, he added.

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