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Are Singapore Rent Prices for HDB and Condos Finally Coming Down? (2024)
Singapore rent prices have been a topic of conversation for a while now. For those who have to take on a unit or room for rent in Singapore, you’ve witnessed how rental prices surged to record highs throughout the pandemic.
2023 saw a softening of the buoyant rental market. Our latest Singapore Property Market Report Q1 2024 shows that asking rents have stabilised and have been dipping slowly since Q1 2023. So begets the question: Will Singapore rent prices for HDB flats and private properties finally come down in 2024? Let’s find out.
High Rent Prices in 2023: A Lookback
2023 saw actual rental prices going up less quickly in 2022. Correspondingly, we saw asking prices stabilise and decline in the same year. The Singapore Property Rental Price Index peaked at 179.20 in Q1 2023 before decreasing for four subsequent quarters to arrive at 166.42 in Q1 2024.
With more moving into their homes and more rental units on the market, local demand abated. Landlords who may have initially been reluctant to lower asking prices, had to give in to market pressures and lower their rental prices at the risk of their properties remaining vacant.
Approximately 19,000 condo units and 21,400 BTO flats were completed in 2023. Supply was gradually being restored. Correspondingly, the Singapore Property Rental Supply Index increased from 64.43 in Q1 2023 to 95.19 in Q4 2023.
The number of enquiries for the same period also declined. The Singapore Property Rental Demand Index decreased from 173.89 in Q1 2023 to 125.03 in Q4 2023, confirming that fewer people were looking to rent.
Despite the softening rental market, the lived reality was many still had to deal with steep rental prices. In our Singapore Consumer Sentiment Study H1 2024, 85% of renters felt rental prices were too high. These renters were surveyed from 9 November to 12 December 2023, with 74% of the surveyed renters having experienced a huge increase in rental prices upon renewing their leases.
Rent Prices in 2024: What’s Happening Now?
Diminishing rental demand from local renters | 100,000 homes expected to be built from 2023 to 2025, more homeowners moving into completed homes |
Influx of foreign workers may increase rental demand among them | However, the number of expatriates seeking to rent is insufficient to make up for easing local demand. |
Rental prices expected to maintain stability across 2024 | Prices are unlikely to return to pre-pandemic levels, rent moderation felt first in OCR and neighbourhoods which has an influx of newly completed units |
Here’s an overview of what we can expect from the rental market in 2024.
1. Diminishing Rental Demand from Local Renters
Last year alone, 80% of the pandemic-delayed projects were delivered. The other affected projects are expected to be completed by early 2025. With a total of 19,600 BTO flats launched across three sales exercises in 2024 and shorter waiting times, demand from first-time homeowners will also likely cool further.
In the private home market, a similar narrative was observed. 2023 marked the highest number of completions of private homes (including ECs) since 2016, underscoring the substantial increase in available housing.
As more families move into their completed homes, local demand has seen a marked reduction with the Singapore Property Rental Demand Index lowering by 13.5% in Q1 2024.
2. Likely Increase in Foreign Rental Demand
While there is decreased local demand, we may see more foreigners seeking to rent in Singapore.
Despite slowing economic growth, the Singapore economy still grew in Q1 2024 and a gradual pickup is expected. Amid a volatile and uncertain global economic landscape, Singapore still remains perceived and seeks to position itself as a ‘trusted, neutral’ node. 1,113,000 work permits were issued in 2023, up from the 1,033,500 issued in 2022.
However, this influx of expatriates is insufficient to counterbalance the diminished demand from Singaporean renters.
3. Rental Prices Expected to Stabilise
With dampening demand, asking prices have followed suit. The Singapore Property Rental Price Index dropped from 167.29 in Q4 2023 to 166.42 in Q1 2024. While the upward trend of rental prices did not subside in 2023, actual rental prices fell for the first time in three years in Q1 2024.
All signs point to Singapore rent prices coming down, but perhaps not as much and not as fast as Singaporean renters would like them to be.
As we transition from a landlord’s market towards a more tenant-friendly one, the effects of rent moderation will likely be felt first in areas further from the city centre and locations with an influx of newly completed units. But it is unlikely that we will see pre-pandemic rental prices anytime soon.
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