Singapore HDB rents to rise by 1-3% next year

Rents in the city fringe could experience more rental growth.

In 2023, there was a substantial reduction in flats reaching their five-year Minimum Occupation Period (MOP) in Singapore, causing a spike in HDB rents. According to OrangeTee, the number of MOP flats dipped from 31,325 units in 2022 to 15,748 units in 2023. Simultaneously, demand for HDB flats surged, with more tenants opting for affordable housing. 

Here’s more from OrangeTee Research:

Looking ahead, rental stock is expected to dwindle further, with the number of MOP flats slipping to 13,093 units in 2024 and 7,454 units in 2025. Further, rental inventory may shrink since the rise in the Additional Buyers’ Stamp Duty for buyers holding multiple properties will continue to discourage homeowners from keeping their flats for rental income. 

On the demand side, local tenants may continue to shrink while others may shift back to the private market should private rents continue to moderate. However, foreign demand may rise should the job market improve next year. 

Rent prices are projected to stabilise in 2024, with a slight increment of between 1 and 3 per cent amid a tighter housing market. Flats in city fringe areas could experience more rental growth as fewer flats will reach MOP next year, with the highest completions in Toa Payoh at 1,286 units, Geylang at 642 units and Queenstown at 489 units. Comparatively, 2,023 units were completed in the city fringe Bukit Merah and 1,179 units in Queenstown in 2022. 

As rental stock continues to fall, the number of rental applications may shrink in tandem. Coupled with some demand possibly being diverted to the private market, we estimate that HDB rental volume may dip from 36,000 to 38,000 units in 2023 to around 33,000 to 35,000 units in 2024.