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RENTAL volumes for condominiums and HDB flats fell for the second consecutive month in September.

Condo leasing volumes fell 17.2 per cent on the month to 6,172 units rented, down from the 7,456 units leased in August, based on flash estimates from SRX and 99.co released on Friday (Oct 18).

Year on year, rental volumes were 7.7 per cent higher. But based on the five-year average volume for September, rental volumes were 5 per cent lower.

By region, 34.5 per cent of the total volume were from the Outside Central Region (OCR), 33.4 per cent were from the Rest of Central Region (RCR), and 32.1 per cent were from the Core Central Region (CCR).

In the market for Housing and Development Board flats, rental volumes fell month on month in September by 11.8 per cent, with an estimated 2,314 flats rented, down from 2,625 units in August.

Year on year, volumes fell 17.3 per cent; they also were 11.7 per cent lower than the five-year average volumes for September.

Luqman Hakim, chief data and analytics officer at 99.co, said the slowdown in leasing volumes in both markets comes as renters are “potentially delaying decisions due to ongoing stabilisation of rents”.

“While demand remains supported by expatriates, international students and foreign workers entering Singapore, the completion of around 7,000 new condo units in the second half of 2024 is expected to increase the rental inventory, and potentially ease market tightness further,” he added.

He also cautioned that demand for HDB rentals may soften as tenants go for the newly completed condos and some HDB flat owners upgrade to private properties.

Mark Yip, chief executive of Huttons Asia, noted that the condo rental market could end 2024 flat as demand slowly returns.

“There are more new project launches in October and November 2024. Some buyers of these new projects might sell their current properties and rent in the interim,” he said. “This may provide some support to the HDB rental market, and HDB rents could increase by between 2 and 3 per cent in 2024.”

HDB rents were slightly higher in September, inching up 0.1 per cent from the previous month.

Wong Shanting, head of research and market intelligence at ERA, noted that a tighter supply of HDB rental units have sent rents north.

She also highlighted that falling numbers of units still under their minimum occupation period have led to a crunch in HDB flats for lease, driving up rents. Thus, she expects the rising demand to continue fuelling HDB rental pricing.

Rents fell by 0.1 per cent in mature estates, but rose by 0.3 per cent in non-mature ones.

By room type, prices were up 0.3 per cent for three-room flats and 0.2 per cent for both four-room and executive flats. Rents for five-room flats, dipped 0.2 per cent.

Overall rents gained 3.7 per cent on the year, with both the mature and non-mature estates each logging gains of 3.7 per cent.

Year on year, executive flats recorded the largest price increase at 7 per cent, followed by four-room flats at 4.2 per cent. Three-room flats rents rose 3.7 per cent, and five-room flats were up 2 per cent.

In the condo market, rents were down 0.2 per cent in September. Prices rose 0.5 per cent in the CCR and 0.2 per cent in the RCR, but fell 1.1 per cent in the OCR.

Year on year, overall rents fell by 3.6 per cent from September 2023. By region, prices were down 4.7 per cent in the CCR, 3.2 per cent in RCR and 3.3 per cent in the OCR.

Christine Sun, chief researcher and strategist at OrangeTee, said while private rental prices weakened marginally last month, a broader analysis shows that “overall price trends have stabilised, with no significant growth observed”.

“When comparing prices over the past six months, from March 2024 to September 2024, private rental prices have remained unchanged,” she added. “This indicates that the market has largely stabilised and rents may have bottomed.”

Looking ahead, Sun said some positive factors could cushion rental prices from a sharp correction.

One factor is that more tenants could move from public housing to private rentals, since rentals among private properties have stabilised and bottomed, she said.

She also expects falling interest rates to lift both the private and HDB rental markets.

“Lower borrowing costs will enhance business sentiment and contribute to employment growth, including a possible increase in expatriate hiring,” she said.

“Landlords may be more willing to negotiate lower rents, as their home mortgage costs are likely to decrease when they refinance in the future.”