HDB rental prices drop for the first time since October 2021

4 min read

In the real estate realm, we’re witnessing a dip in condo rental volumes and prices for the third consecutive month. Simultaneously, HDB rental prices are experiencing a drop for the first time since 2021. 

Let’s jump into the details to understand the dynamics shaping this shift in our housing market.

Condo rental volume breakdown by year - HDB rental prices drop

Condo rental market

In October 2023, condo rents experienced a marginal decrease of 0.2% from September 2023. Regional disparities are notable, with RCR (Rest of Central Region) rents inching up by 0.8%, while CCR (Core Central Region) and OCR (Outside Central Region) rents faced a slight downturn by 0.3% and 0.9%, respectively.

Year-on-year data reveals an overall increase of 10.8% in rents from October 2022. Additionally, distinct upticks are observed in CCR (8.2%), RCR (12.1%), and OCR (12.2%).

Despite this, rental volumes took a hit, decreasing by 5.4% month-on-month. The count stands at 5,402 units rented in October 2023, down from 5,713 units in September 2023. 

On another note, year-on-year rental volumes increased by 0.6%. However, this figure remains 11.4% lower than the 5-year average for October. When examining regions, OCR contributed 34.8%, RCR 34.3%, and CCR 30.9% to the total rental volumes in October 2023.

Read also: Condo resale market dynamics in October 2023 (Flash report cover)

This table combines the information regarding changes in rent, year-on-year rent increases, and regional contribution percentages:

Region Month-on-month rental price change (%) Year-on-year rental price change (%) Year-on-year rental volume change (%)
CCR -0.3 8.2 30.9
RCR +0.8 12.1 34.3
OCR -0.9 12.2 34.8
HDB rental volume breakdown by months and year - HDB rental prices drop

HDB rental market

In the HDB rental landscape, October 2023 witnessed a 0.4% decline in rents from September 2023. Mature Estates experienced a slight dip of 0.1%, while Non-Mature Estates saw a modest increase of 0.1%.

Year-on-year data, on the other hand, tells a different story, showcasing an overall increase of 14.1% in rents from October 2022. The surge is further broken down into 12.7% for Mature Estates and a more substantial 15.4% for Non-Mature Estates.

Metric Month-on-month change in rent prices (%) Year-on-year change in rent prices (%)
Overall -0.4 +14.1
Mature Estates -0.1 +12.7
Non-Mature Estates +0.1 +15.4

Analysing room types, 3 Room and 5 Room rents decreased by 0.6% and 1.4%, while 4 Room and Executive rents increased by 0.1% and 0.9%, respectively.

Contrary to the condo market, HDB rental volumes experienced a 2.4% uptick month-on-month, with an estimated 2,830 units rented in October 2023 compared to 2,763 units in September 2023. 

Year-on-year, rental volumes increased by 14.9%, surpassing the 5-year average volume for October by 1.7%. The breakdown by room type indicates that 31.9% of total volumes are from 3 Room, 37.7% from 4 Room, 24.5% from 5 Room, and 5.9% from Executive units.

Factors influencing the condo and HDB rental price drop
Image credit: Artist’s impression of Riverfront Residences

Factors influencing this trend

Several factors contribute to this shift in our rental landscape:

Pandemic-induced changes

Firstly, pandemic-induced rental demand pressures have eased. According to Mr. Luqman Hakim, Chief Data & Analytics Officer, the reopening of land borders has diminished the need for temporary rentals, particularly for workers from Malaysia who constitute a significant portion of Singapore’s workforce. 

Spillover from new launch absence

Mr. Luqman also shared that the absence of recent new property launches has had a spillover effect, impacting the rental market negatively. 

Traditionally, homeowners would sell their properties before new launches to avoid higher ABSD charges and reside in rental homes until the new launches are ready. 

The scarcity of new launches has disrupted this pattern, affecting the rental market and contributing to a rise in vacancy rates, the highest observed in five years.

Completion of more homes

Moreover, the completion of more homes, evidenced by around 9,000 private residential units completed in Q3, has seen a surge in local households moving into new dwellings. 

The trend is expected to continue, with approximately 20,400 private homes slated for completion in 2023, marking the most significant annual supply completion since 2017. These properties include notable projects like The Woodleigh Residences, Affinity at Serangoon, and Riverfront Residences

All these factors intertwining throughout the year have resulted in both the condo and HDB rental markets exhibiting tepid conditions, with the trend persisting into October 2023.

Supply forecast

Looking ahead, forecasts predict an additional 8,959 private residential units to be completed in 2024. The increasing supply is anticipated to alleviate the pressure on asking rents as domestic demand subsides.

Thinking about leaving rental properties behind for your own home? Connect with a premier property consultant today.


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About Sophiyanah David

Sophi, a seasoned copywriter specialising in Singaporean real estate and property, is one of the minds behind 99.co's informative articles. Like her colleagues at 99.co, Sophi is dedicated to keeping you informed about the ever-changing world of real estate so you can find your forever home. When off the clock, you can find her giggling and kicking her feet as she reads her romance novels, watching anime - if FMBA is not your fave, she might fight you (but you'll probably win) and looking up latest skincare trends.

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