SINGAPORE: Public and private housing rents continued to rise in the third quarter of 2022 to hit all-time highs, with private housing rents up 8.6%, according to government housing data released on Friday (June 28). october).
This is a steeper increase than the 6.7 percent increase recorded in the previous quarter and the steepest quarterly rent increase since the third quarter of 2007, when private residential rents increased 11.4 percent.
Giving a breakdown of the data, the Urban Redevelopment Authority (URA) It said rents for homes on land rose the fastest, rising 10.9 percent in the July-September period, compared with a 3.2 percent rise in the previous quarter.
Excluding executive condominiums, rates for condominiums in the Central Midwest increased 7 percent in the latest quarter, while those in the Rest of the Midwest and Outer Midwest increased 9.6 percent and 8. 8 percent, respectively.
The URA rental index for private residential properties reached 137.9, the highest point on record. The index takes as a reference the rents of the first quarter of 2009, when the private residential rent is assigned 100 in the index.
as for Housing and Development Board (HDB) flats, rents were also higher in the third quarter of this year.
The average monthly rate to rent a five-bedroom HDB flat in Queenstown, for example, is now S$3,600, an increase of S$400 from S$3,200 the previous quarter, HDB said in a separate statement.
Data from the SRX Rental Index, which tracks public housing rentals, showed that the cost of renting an HDB flat at the end of September is at a record high. HDB rents increased 20.9 percent in the first nine months of this year.
The quarterly URA and HDB data cover the period before a series of government cooling measures came into force on September 30.
The measures included the imposition of lending limits to moderate demand in the HDB resale market amid rising interest rates and a new 15-month waiting period aimed at private homeowners looking to downgrade to a HDB flat.
Experts had said the new waiting period could push up rents.
STRONG DEMAND FOR RENTAL PRIVATE HOMES
Private home rental transactions also increased by double-digit percentage points, indicating that demand remains strong.
According to URA data, transaction volume grew 20.5 percent in the third quarter to 25,382 units, up from 21,068 units in the second quarter.
As for the HDB rental market, there were fewer approved applications to rent HDB flats in the third quarter with approved applications falling 12 percent from 9,309 units in the second quarter to 8,192 units in the latest quarter.
This is the third decline in approved applications in consecutive quarters, HDB said.
Compared to the third quarter of 2021, when 10,417 rental units were approved, rental volume in the same period this year fell 21.4%.
At the end of September there were 56,372 HDB flats for rent, a slight increase of 0.6% 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, private residential property prices rose 3.8 percent from July to September, slightly more than the 3.5 percent rise in the previous quarter, the URA said.
- Real estate prices increased 1.6% in the third quarter of 2022, moderating from the 2.9% increase in the previous quarter.
- Landless property prices rose 4.4 percent, compared with a 3.6 percent rise in the previous quarter.
- The pace of price increases in the latest quarter was fastest for condominiums outside the Central region, which rose 7.5 percent.
- Condominiums in the Central Midwest and the Rest of the Midwest increased 2.3 percent and 2.8 percent, respectively.
- In the third quarter, developers released 1,455 private homes (excluding executive condos), down from 1,956 units in the second quarter. They also sold fewer private residences: 2,187 in the third quarter compared to 2,397 in the previous quarter.
- There were 3,719 resale transactions in the latest quarter, compared to 4,236 units traded in the previous quarter.
- Resale transactions accounted for 60.5 percent of all sales transactions in the third quarter, which is down from 62.2 percent in the second quarter.
HDB RESALE PRICES RISING, ALTHOUGH AT A SLOWER PACE
- HDB home resale prices rose 2.6% in the third quarter, slower than the previous quarter’s 2.8% rise, according to the HDB Resale Price Index, which reflects broad movements in prices on the resale market.
- There were 7,546 public flat resale transactions in the third quarter, an increase of 10.7 percent compared to 6,819 transactions in the second quarter.
- HDB resale transactions in the third quarter were 10.5% lower in 2022 than in 2021.
RENT INCREASE EXPECTED TO PERSIST: EXPERTS
Real estate observers attributed the reasons for the increase in rental rates to the return of foreign students and expats.
They added that delays in the construction of new public and private housing due to the Covid-19 pandemic, which caused more home buyers to look to the rental market, had also increased rental demand.
At the same time, expectations of further increases in interest rates have prompted homeowners to raise their rents as they anticipate higher mortgage payments, experts said.
Ms. Christine Sun, Senior Vice President of Research and Analysis at OrangeTee & Tie, said: “With higher property taxes and possibly higher costs of living next year, we can expect landlords to raise rents even higher.
“Also, the 15-month waiting period for private landlords buying HDB resale flats may lead to more people renting in the meantime. Increased demand will inevitably push rents higher next year.”
Mr. Lee Sze Teck, senior director of research at Huttons Asia, noted that the return of foreign students and sustained expatriate recruitment are increasing demand for housing, but rising rents have exceeded some of their budgets and caused a movement of “musical chairs”. of tenants
“Some of them have moved from the central core region to the rest of the core region, while (others) have moved from the rest of the core region to the outer core region,” he said.
This is probably why rents in both the rest of the Midwest and outside the Midwest have risen at the fastest rate 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 prices are removed. delays in completion.
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, it added.