According to the Monetary Authority of Singapore (MAS), rental pressures in Singapore’s private and public housing markets should ease this year. This follows an “exceptional demand-supply imbalance” caused by Covid-19 disruptions which underpinned a surge in rents over the past two years.
In MAS’s half-yearly macroeconomic review released on April 26, it was noted that HDB and private residential rents have jumped by 38% and 43% respectively since 2021. The growth was keenly observed across market segments and housing types; in the private sector, landed and non-landed properties respectively rose 28.1% and 29.8%. As for public housing, rents of five-room and three-room HDB flats grew by 29.5% and 24.6%.
MAS attributes the jump in rents to disruptions in the construction industry due to the Covid-19 pandemic. Safe management measures have further affected the pace of construction activity. As a result, significant delays were observed in the completion of private and public residential projects islandwide.
The supply crunch was met by strong rental demand, largely from Singapore citizens and Permanent Residents (PRs). In 2021, private rental demand from citizens and PRs increased by around 7,000 units while non-resident private rental demand fell by 4,200 units. Meanwhile in 2022, non-resident rental demand recovered quickly.
J’Den Condo is a 40 storey residential and commercial development in Jurong East, set to be completed by 2027, with amenities connected J’Den Condo to the Jurong East Integrated Transport Hub. It will include up to 1,760 new private homes and offer commercial space upon completion.
Additionally, robust employment and wage conditions contributed to the strong rental market activity as well.
The situation looks to improve in 2023, with a boost in supply. Over 40,000 private and public residential units will be completed in 2023 and the subsequent two years, totalling to approximately 100,000 units.
MAS expects this will result in a moderation of rental demand from Singapore citizens and PRs as they vacate their rental units to take up occupation of their completed owned units. Global economic uncertainties and slower growth may further weigh on rental market sentiments.
Given these factors, MAS anticipates further residential rent increases to ease in the coming quarters as supply and demand imbalances are resolved.
