Last Updated on 2023-02-02 , 8:05 pm
A four-room HDB flat in Tiong Bahru just broke the record for the highest rental price monthly, with a price tag of $6,200 a month. It was an older flat of about 1,200 square feet at Block 17 Seng Poh Road, with less than a 50-year lease remaining.
Additionally, there are at least three other four-room flats with a monthly rent of over $6,000. Two are in Pinnacle @ Duxton, while the other is in the Whampoa area at Jalan Tenteram.
Unfortunately, this exorbitant rental price isn’t an outlier but a reflection of rising price trends. Four-room HDB flats with monthly rents of over $4,000 have doubled in the past two months, at 223 units. This applied to all areas islandwide, not just your typical atas neighbourhoods.
Shin Min Daily News reveals the top four reasons why HDB rentals are increasing in price, according to industry experts.
Fewer Flats Meeting Minimum Occupancy Period in 2023
The new batch of five-year minimum occupancy period flats will drop sharply this year, from 31,000 to 15,700.
This means that fewer units will be released for buyers, and renting will continue to dominate the housing market.
Constant Demand from Everyone
With the influx of foreign employees and students after our borders reopened after the pandemic, there has been an increase in demand for housing.
Additionally, there has been a shortage of university and employee dormitories, alongside an increase in young couples renting houses while waiting for their BTO to be ready.
With such high demand from all types of renters, rental prices are expected to continue to rise.
It may be even worse for specific areas like Toa Payoh, which saw an increase from four to 21 flats that crossed the $4,000 rental price mark in 2023. Similar areas with many schools, industrial areas and office buildings nearby may experience a similar spike in rental prices.
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Soaring Private Apartment Rental Prices
According to data from real estate websites and the Singapore Real Estate Exchange (SRX) for November 2022, the price of private housing rent rose by 34%. This is higher than the 27.8% increase for HDB rent.
Thus, people who originally wanted to rent private housing may end up switching to HDB rentals, which are more budget-friendly.
Rising Bank Interest Rates
Last but not least, bank interest rates have also been on the rise.
Landlords who borrowed from banks to finance the houses may thus face higher interest rates and pass it on to their renters via higher rental prices.
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