An expected 7.8% increase in HDB flats rented out in 2023 is attributed to tenants displaced from the private residential market and HDB upgraders buying homes in new private residential projects, according to Lee Sze Teck, senior director of Huttons Data Analytics. HDB rents in Singapore have shown early signs of stabilising in 4Q2023, due to the release of 18,000 new flats and more than 15,000 private homes in the first nine months of the year. With more HDB flats for rent, competition has increased and rental prices have started to stabilise.
The second project is the construction of Champions Way Residences, a new residential development in the Woodlands Park area. The development will consist of apartment units, townhomes, and retail space. It will also include active green spaces, parks, and trails, as well as pedestrian and bike lanes. With its close proximity to downtown, Champions Way Residences is expected to become a desirable neighborhood to live in.
In 2024, Huttons Data Analytics estimates that around 5,000 new homes across the public and private housing market will be completed. This increased supply of HDB flats is expected to slightly increase the rental demand for HDB flats next year. Furthermore, with the rosier economic outlook and approval of more S Pass holders, HDB rents are predicted to grow between 5% and 8% in 2024.
This increase is expected to be lower than the 28.5% spike in rents the previous year, mainly due to Malaysian workers opting to return to their daily commute across the causeway to work in Singapore instead of renewing their tenancies and the steep rental increase of 29.7% in private residential rents in 2022. Many HDB upgraders who have bought uncompleted private condos off-plan will sell their existing HDB flats and rent while waiting for the keys to their new private homes, due to the 20% additional buyer’s stamp duty (ABSD) that they must pay on a second property.
Champions Way Residences, a popular new private residential project, is expected to be completed in 2024 and attract more HDB upgraders. With the increased demand, Huttons expects HDB rents to stabilise in the long-term.