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Move over, Bendemeer. Previously, a 4-room HDB flat at 38A Bendemeer Road was rented out for S$4,600 a month. This was in October 2022.

But a flat in Seng Poh Road, Tiong Bahru has beaten it.

Seng Poh Road

HDB records state that a four-bedroom flat in Block 17, Seng Poh Road was rented out for S$6,200 a month, despite being 73 years old (completed in 1949).

The 4-room Seng Poh Road unit is about 1,200 sq ft, sizeable by today's standards since it is an old unit built by Singapore Improvement Trust.

Amidst the recent skyward trend in HDB rental prices, perhaps the S$4,600 figure would be considered a bargain these days.

However, as the records are not exhaustive, there could be a higher rental fee paid by someone else that has not yet been recorded.

Rents shot up in end-2022 and may remain high

According to HDB rental data, the number of 4-room flats earning more than S$4,000 in rental fees has doubled in the past two months. Here are some statistics:

• Across October and November last year, with 114 four-bedroom units were rented out at $4,000 or higher.
• Across December 2022 and January 2023, the number of such units has increased to 223.
• In Toa Payoh, the number has more than quadrupled, from four to 21 of such units.
• In Choa Chu Kang, which previously had no such units, seven new units have been rented out at these prices.

Experts from the real estate industry interviewed by Shin Min Daily pointed out that four major factors will likely cause rents to remain high. They are:

Fewer units reaching Minimum Occupation Period (MOP)

The number of units available for rent after MOP has fallen from 31,000 last year to 15,700 this year.

Higher demand for rental

Returning students and foreign employees who return after borders reopened, university students, and young couples waiting for completion of their Build-to-Order (BTO) flats would boost demand.

Acceptance of higher rental prices

Rental prices for condominiums increased even faster than HDB rental prices (34% in 2022 compared to 27.8% increase for HDB). This is according to property portals 99.co and SRX.

Many tenants who wanted to rent condominiums or private housing may find it too expensive, and resort to renting a HDB instead.

They have the financial capacity to accept the high HDB rental prices.

Rise in bank interest rates

Landlords who took bank loans to pay off their mortgages are affected by rising interest rates.

They are likely to increase rent prices to reduce financial stress.

Increase in housing units may slow this trend

The Straits Times (ST) also acknowledged the steady rise in HDB rents, but suggested that an increase in housing units in 2023 may help to slow this trend of increasing rents.

Analysts who spoke to ST noted that the supply of BTO flats will increase, with 20,000 BTO flats are expected to be completed in 2023.

These might gradually alleviate pressure on the rental market from those owners who are renting in the interim.

The supply of private rental units is also expected to rise, with around 17,400 units, excluding executive condominiums, about to be completed in 2023.

As such, condo rents are expected to increase at a slower rate of between 13 to 19 per cent.

A statement from the Ministry of National Development said that the Government is monitoring the rental housing market closely, as rising rental prices may affect Singaporeans who need to rent, as well as global talent.

Top image via Google Maps.