SINGAPORE: Renting Singaporeans can expect moderate rent increases, particularly in suburban areas this year.
According to OrangeTee’s Private Residential & HDB Rental Outlook for 2025, rental prices for private homes and HDB flats are expected to rise by 2% to 4%, driven by a shrinking supply of new units.
Private rental
Private rental prices are expected to rise by 2 to 4 per cent in 2025, driven by improved macroeconomic conditions, employment growth, and limited rental supply.
Based on the International Monetary Fund’s (IMF) latest World Economic Outlook report, global growth is also expected to remain stable while business sentiment is set to improve as interest rates fall and economic conditions strengthen, which will boost expat hiring and, in turn, benefit the rental market.
Estimates from the Urban Redevelopment Authority (URA) revealed private home completions will drop to about 5,348 units in 2025, down from 9,103 units in 2024 and 19,968 units in 2023.
Rental growth is expected across all market segments, driven by fewer new private homes, with suburban and city fringe areas seeing the biggest rent increases due to a larger supply drop.
For example, this year, only about 2,010 suburban homes in the Outside Central Region (OCR), excluding executive condominiums (EC), are expected to receive their Temporary Occupation Permit (TOP), down 68.8% from the past 10-year average of 6,444 units.
In the city fringe, 1,544 homes are set for completion, 59.1% below the past 10-year average of 3,777 units. Meanwhile, the Core Central Region (CCR) will see 1,794 units completed, close to the past 10-year average of 1,907 units.
HDB Rental
HDB rental prices are also expected to rise by 2 to 4 per cent in 2025, driven by a decrease in available flats for lease.
However, competition from the private rental market may limit growth as more tenants move from public housing due to lower private rents and landlords offering more flexible lease terms.
Meanwhile, the number of flats reaching their five-year Minimum Occupation Period (MOP) is projected to drop to a 10-year low of 6,974 units in 2025, down from 11,952 units in 2024.
As fewer flats become available, the rental price gap between private homes and larger HDB flats is narrowing. For example, the median rent for private homes in suburban areas dropped to S$3,700 in October 2024, just S$200 more than the rent for a five-room flat.
With fewer MOP flats and private homes available, the rent gap is expected to stabilise. Orangetee estimates that HDB rental volume will stay stable at 36,500 to 38,000 units in 2024 and 2025 but lower than the 39,138 units leased in 2023, mainly due to fewer MOP flats.
/TISG
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