SINGAPORE condominium rents rebounded slightly in March after seven straight months of decline, supported by healthy leasing demand from renters who returned after the festive Chinese New Year period in February.

Rental volumes for both condo and Housing and Development Board (HDB) flats recovered during the month after falling in February, based on flash estimates released by SRX and 99.co on Thursday (Apr 18).

Condo rents inched up 0.3 per cent month on month amid higher competition for units, said ERA key executive officer Eugene Lim. Year on year, condo rents were down 3.4 per cent, the data showed.

Rental volumes, meanwhile, jumped 19.1 per cent on the month to 5,677 units in March, compared with 4,766 units in February. Year on year, rental volumes were 14.9 per cent higher, but 6.9 per cent lower than the five-year average volume for the month of March.

Property analysts from OrangeTee and ERA Realty attributed the rise in demand for condo rentals to the narrowing price gap between condos and HDBs.

This has made condos a more attractive option for some tenants, said Christine Sun, chief researcher and strategist at OrangeTee Group.

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In contrast, Huttons chief executive Mark Yip believes the stronger leasing demand could be due to more landlords compromising on reasonable rents.

“Rather than leaving their condo units empty, landlords would prefer to rent out their units to at least cover their mortgage instalments and taxes,” Yip said,

He added that it is less likely to be the case of tenants moving from the HDB market to the condo market as the rental gap is still substantial.

Echoing the sentiment, 99.co chief data and analytics officer Luqman Hakim said: “With strong demand for cheaper rentals as inflation hits, HDB rentals still remain more affordable compared to condos despite the softened condo rental market.”

For Mogul.sg chief research officer Nicholas Mak, the recovery observed in March was just a “technical re-bounce” and does not indicate a reversal of the overall trend of weakening rental demand.

With the Singapore economy growing at a slower pace, there could be lower demand for foreign labour, which will result in lower residential leasing demand for both HDB flats and private housing, he noted.

“Furthermore, there is a steady supply of newly completed private housing units for the next two years, as well as new HDB flats that will be eligible to be rented out by their owners,” Mak added.

The Outside Central Region (OCR) had the most leasing activity in March, with 36.4 per cent of total volumes attributed to the region. This was followed closely by the Rest of Central Region (RCR), which accounted for 32.6 per cent of total rental volumes, and 31 per cent from the Core Central Region (CCR).

Rents in the RCR increased the most month on month, rising 0.9 per cent, followed by rents in the CCR, which rose 0.3 per cent. In contrast, rents in the OCR fell by 0.3 per cent.

Rents in all regions slipped compared with the previous year. Prices in the CCR declined the most, at 5.5 per cent, followed by the RCR at 2.6 per cent, and the OCR at 2.1 per cent.

Meanwhile, HDB rents rose for the second straight month, recording a gain of 0.6 per cent from February. Rents rose not only in both mature and non-mature estates, but also across all room types.

Mature estate rents were up 0.6 per cent on month and 7.5 per cent higher on year, while non-mature estate rents rose 0.7 per cent on month and 8.9 per cent on year.

Larger HDB flats commanded higher rents in March, with five-room flat rents rising 1.5 per cent and executive flat rents increasing 1.3 per cent. Four-room flat rents recorded a slight increase of 0.3 per cent, while three-room flat rents climbed 0.8 per cent.

HDB leasing volumes also recovered in March, advancing 9.8 per cent to 2,689 flats rented from 2,448 flats in February.

However, volumes were down 12.1 per cent year on year and were 11 per cent lower than the five-year average volume for the month of March.

“The increase in HDB leasing demand may be due to more Malaysians seeking employment in Singapore to take advantage of the stronger Singapore dollar. Some may have decided to stay in Singapore rather than commute daily,” Hutton’s Yip said.

Four-room flats continued to be popular, accounting for 36.3 per cent of rental volumes in March, followed by three-room flats (33.6 per cent) and five-room flats (24.5 per cent). Executive flats made up only 5.7 per cent of HDB rental volumes.