SINGAPORE – The rental markets for Housing Board (HDB) flats and private apartments ended on a robust note in 2021, as rents surged by more than 10 per cent despite demand slipping in December.

Condo rents jumped by 11.4 per cent while HDB rents climbed by 10.4 per cent in the whole of last year, as more turned to rental housing options owing to construction delays caused by the Covid-19 pandemic, according to flash data from real estate portals 99.co and SRX released on Wednesday (Jan 12).

Monthly rents for condos rose by 1.1 per cent last month, with price growth observed across the board in central Singapore, the city fringes and suburbs.

Rents for HDB flats rose for the 18th consecutive month last month at a faster pace of 1.4 per cent over November across all flat types in both mature and non-mature estates.

ERA Singapore head of research and consultancy Nicholas Mak said one of the reasons for the steady rise in rents was the construction delays plaguing new HDB flats and private housing.

More home buyers may now have to rent accommodation while waiting for their new homes to be completed, thus propping up rental demand, he added.

“As the stock of housing units for rent is fairly inelastic, the rental rates of both private and public housing increased in the past year,” Mr Mak said.

The latest round of property cooling measures introduced in mid-December could possibly increase rental housing demand, he added.

Measures include an increase in additional buyer’s stamp duty rate from 12 per cent to 17 per cent for citizens buying their second residential property, and from 15 per cent to 25 per cent for those buying their third and subsequent properties.

“This will incentivise a home buyer who already owns a property to sell his existing property before buying the next property. If the next property is under construction, this home buyer will need to rent accommodation while waiting for his new home to be completed,” said Mr Mak.

Last month, rental volume for both markets fell, SRX data showed.

An estimated 4,512 condo units were rented last month, down 1 per cent from the month before.

However, total condo rental volume in 2021 was up by 6.8 per cent compared with 2020.

The HDB rental market saw an estimated 1,770 flats rented last month, down 1.2 per cent from November.

Total HDB rental volume in 2021 was 4 per cent up from 2020.

Huttons Asia chief executive Mark Yip said the decline in rental volume in December was likely due to the tightening of border measures to slow down the import of the Omicron coronavirus variant into Singapore.

Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, noted that the seasonal lull may have been a factor as more foreigners returned to their countries for the festive period.

However, she noted that rents for both markets may soon pick up in the coming months as foreigners return to Singapore after the year-end break.