HDB rental prices poised for a steady climb in 2024 as demand surges and supply shrinks

SINGAPORE: The HDB rental market is poised for stability with moderate growth in the coming years, thanks to improved demand, constrained inventory, and a surge in leasing activity.

Industry experts predict that rental prices will rise steadily in 2024 and continue their upward trend into 2025.

Rental price growth forecast for 2024

According to the Singapore Business Review, OrangeTee projects that HDB rental prices will see a 2%-3% increase in 2024. This outlook is supported by a 2.9% spike in rental volumes recorded in October, partly driven by HDB upgraders who are renting flats temporarily to avoid paying the Additional Buyer’s Stamp Duty (ABSD).

The uptick in leasing activity is expected to continue into 2025, with a further projected growth rate of 2%-4%.

“Global economic growth is expected to remain stable next year, with business sentiment improving as lower interest rates and a brightening economy help reduce business costs. This will stimulate expatriate hiring, which will, in turn, benefit the rental market,” OrangeTee noted in its commentary.

Meanwhile, Luqman Hakim, Chief Data and Analytics Officer at 99.co, explained in a Business Times report, “The shortage of HDB units reaching their minimum occupation period has worsened the supply crunch, driving rents upward. This trend is expected to continue, with rental prices likely to rise by 2% to 3% through the end of 2024.”

Huttons, another key player in the market, also predicts a positive outlook for the HDB rental sector, forecasting a 3%-4% increase in 2024. The firm anticipates the market’s resilience will carry through into 2025, driven by ongoing demand and supply dynamics.

In contrast, the private condominium rental market is expected to end 2024 relatively flat, as demand gradually returns with the improving economy. With five private property launches scheduled for November 2024, some buyers may opt to sell their current properties and rent in the interim, further influencing rental trends.

The HDB rental market is expected to remain a stable investment option soon, with moderate price increases anticipated due to factors like rising demand, limited supply, and macroeconomic improvements.