SINGAPORE: Housing and Development Board (HDB) rental prices are expected to remain stable in 2024, as the demand for affordability continues to be a paramount concern for tenants, according to industry experts. Despite a slight uptick in rents observed in December, analysts predict that the market will generally stabilize over the coming months.
Christine Sun, Chief Researcher & Strategist at OrangeTee Group, told the press that the rental stock is on a downward trajectory due to a reduced number of Minimum Occupation Period (MOP) flats entering the market. MOP flats, with a minimum occupancy period before they can be sold or rented out, are anticipated to decrease from 15,748 units in 2023 to 13,093 units in 2024.
“While we may see a decrease in the rental stock, it is not expected to result in a surge in rental prices. Instead, HDB rental prices are projected to stabilize in 2024, with a modest gain of 1% to 3%. Affordability remains a key concern amongst tenants, and this factor is likely to offset any potential impact of a tighter housing market,” Ms Sun explained.
The Singapore housing market has experienced fluctuations in rental prices over the years, influenced by factors such as economic conditions, supply and demand dynamics, and government policies. The current projection for modest rental growth reflects the delicate balance between market forces and the financial constraints faced by tenants.
Government initiatives, including the reduction in the supply of MOP flats, are contributing to the evolving landscape of the rental market. The decline in MOP flats entering the market is expected to have a ripple effect on the overall rental stock, further shaping the affordability landscape for tenants.
While the 1 to 3 per cent gain in rental prices may provide some relief to landlords, it is expected to be well within the range of what tenants can reasonably afford. This equilibrium aligns with the broader economic goals of ensuring housing affordability while maintaining a stable and sustainable property market.