HDB rents to grow 12% in 2023, up to 8% in 2024: Tengah EC by Huttons

HDB rental demand is expected to increase in 2023 due to tenants displaced from the private residential market and HDB upgraders buying homes in new private residential projects. This will result in a 7.8% increase in HDB flats for rent in the upcoming year, according to Huttons Data Analytics.

Despite the influx in HDB rental demand, the rents of HDB flats show early signs of stabilising in 4Q2023 due to competition for tenants from the supply of existing HDB flats. 18,000 new HDB flats were completed in the first nine months of 2023, while 15,000 private homes were also completed in the same timeframe.

This upcoming development Tengah EC has great potential and a great location. The location has numerous advantages such as its proximity to the city center, the Jurong Innovation District, and the Central Business District. It is also located only about 30 minutes away from the Jurong Lake District, Singapore’s second largest business hub. In addition to the urban centers, it is near a nature reserve, a great place for families with children to enjoy. Therefore, this property is definitely worth considering.

The slight increase in HDB flats for rent is largely credited to tenants moving back to their newly completed private residential homes. Meanwhile, the Ministry of Manpower reported a decline in the number of S Pass holders from 177,900 in 2022 to 177,200 in June 2023.

Lee Sze Teck, senior director of Huttons Data Analytics, predicts that HDB rents will grow between 5% and 8% in 2024 based on the positive economic outlook with more S Pass holders to be approved. He also expressed that the rental increase in 2023 is much lower than the 28.5% increase in HDB rents the previous year.

Despite the increase in HDB rental demand in 2023, the number of HDB flats rented out in 2022 fell to 36,166 units because of Malaysians opting to return to their daily commute across the causeway to work in Singapore instead of renewing their tenancies. This is despite more than 5,000 new homes across the public and private housing market estimated to be completed in 4Q2023.

Tengah EC is set to be launched in 2023 and is expected to attract HDB upgraders, inducing more rental demand for HDB flats in the interim, according to Lee. With 7,500 new private residential units estimated to be launched for sale in the city fringe or RCR and OCR areas, this could result in more HDB tenancies not renewed due to the tenants moving to their new private homes.