Monday, April 30, 2012

Median HDB flat rental prices as of Q1 2012


It seems like the continuous rally of HDB rental prices since the second quarter of 2009 is loosing its steam as the latest median rental data shows that rental price increase has slowed down for 5 room flats, at a plateau for 4 room flats and decreased for 2 room flats.

The rents for 3-room HDB flats has fell 2.4% in Q1 2012 compared to the previous quarter. The rents for 4-room flats have stayed relatively stable for a third quarter in row with only 0.4% increase in the last quarter. Rent increase for 5-room flats also came to a halt following sharp increases in the last few years.

Island wide median rental for 3-room flats decreased first time since third quarter of 2009 and is currently is about 1841 SGD per month. The rents of 4 room flats on the other hand slightly increased from 2229 SGD per month in Q4 2011 to 2238 SGD per month in Q1 2011. 5 room flat rentals continued to increase, albeit with a slower pace to 2476 SGD per month.

As we have written before median HDB rental prices in Singapore are published by HDB quarterly. Below chart shows the price trends for 3 most popular flat types, 3 room flats (2+1), 4 room flats (3+1) and 5 room flats.Median price means half of the sampled prices are below the median and half of the sampled prices are above the median.

As the price increases, more and more HDB flats are released for rent and as a result the number of Housing & Development Board (HDB) flats being sublet has more than tripled in the past five years:

"The reasons include the relaxation of subletting rules, and an increase in foreigners. With more HDB home-owners using their flats to earn rental income, some analysts are concerned this will lead to a shortage of supply in the resale market. The number of HDB flats on the rental market has shot up from about 12,500 in 2006 to 40,026 in 2011."[1]

The slowdown in price rise may be due to several factors such as increased supply, less foreigner demand for rental units and price resistance of tenants to further price increases.


[1] - More subletting HDB flats

No comments:

Post a Comment