Post-pandemic Singapore saw rental prices surge and reach record highs. And if you rent in Singapore, you’ve probably felt the pain of paying the much higher rental prices. According to our Singapore Consumer Sentiment Study H1 2024, 85% of renters feel rents are too high. In turn, they’re seeking more affordable options.
In this article, we’ll examine how high rental prices have affected those who rent in Singapore. Additionally, we’ll delve into what we can expect from the rental market in 2024.
If you intend to rent in Singapore, it’s good to know about the rental market movements and start your search early. As the saying goes, “The early bird gets the catches the worm!”
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When Will Singapore Rent Prices Come Down?
In 2023, the big question for renters in Singapore was, “Will rental prices for HDB and private properties come down?” So, the PropertyGuru team hit the streets to find out what people thought about the rental market in Singapore and summarised their opinions in a video.
We further explored the sentiments surrounding rental prices in Singapore for our CSS H1 2024 survey. Since the making of the video, the completion of BTO projects and condo developments eased local demand and increased supply. About 21,300 private homes (including ECs) were completed in 2023, marking the greatest annual supply completion since 2016. Rental prices coming down was only a matter of time.
Fast forward to 2024: the red-hot rental market has cooled, and we expect a gradual price decline this year. In the last three months of 2023, URA data revealed rental prices dipped for the first time in three years.
This is in line with the Singapore Property Market Report Q4 2023. Our Singapore Property Rental Price Index, which tracks the median asking prices of all property rental listings on PropertyGuru Singapore, also indicates asking prices are gradually coming down.
Rentals are expected to moderate further as 18,500 private units will be completed in 2024 and 2025.
Study: Most Renters Agree Singapore Rent Prices Are Too High
While the market is slowly shifting in favour of tenants, some had no choice but to sign their tenancy agreements when prices peaked last year. Of the renters surveyed from 9 November to 12 December 2023, 85% said rental prices were too high. 74% of renters experienced steep increases in rental prices when they renewed their leases.
69% of Singaporeans expect rental prices to increase in the next six months. 47% expected rents to rise by 5% or more, with those in the low-income group (below $5,000 monthly household salary) being more inclined towards this sentiment. As such, four in five feel more can be done to help those who rent.
While the rental market has softened, overall rental prices remain resilient. In part, the increased borrowing costs due to the high interest rate environment have landlords keeping their asking rental prices up. However, fewer surveyed believe landlords are increasing rent prices due to higher mortgage payments. Like the previous wave, 52% of landlords say they have set their rental rates based on market prices in the same area and unit sizes.
More Renters Are Reducing Their Rental Budgets
In line with the higher rental prices in 2023, more renters surveyed reduced their spending to afford the new rental prices (from 34% in H1 2023 to 37% in H2 2023) and more looked for cheaper rental properties (38% in H1 2023 to 44% in H1 2024).
Higher costs of living also pushed more to reduce their rental budgets. 52% of low-income renters indicated they are willing to allocate only $500 to $1,000 for rent. In this budget range, renters can only afford a shared HDB room or a room in older HDB estates located further from the Central Business District in today’s market.
Acknowledging the burden of rising rental costs on young couples, the government has announced a $300 monthly rental voucher for eligible families waiting for their BTO flats to be completed.
Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group, affirms that the introduction of the Provisional Parenthood Housing Scheme (PPHS) (Open Market) voucher is welcoming news for families in need of urgent housing.
Need to Rent a Singapore Property in 2024?
Additionally, according to our Singapore Property Market Report Q4 2023, the number of HDB rental listings on the PropertyGuru website has steadily climbed in the past few months. This follows the increased number of approved applications to rent out HDB flats. There were 39,138 approved applications in 2023, compared to the 36,166 approvals in 2022, an 8.22% year-on-year increase.
“With the increase in the supply of HDB rental listings, this will broaden the available options for families on a tight rental budget,” says Dr Lee Nai Jia.
In 2024, all signs point towards rental prices coming down. While there is a shift away from a landlord’s market, it is unlikely that we will see rental prices dip to pre-COVID-19 levels. Rent moderation will likely be observed most strongly in less sought-after locations and neighbourhoods with an influx of newly completed units.
If you need a cheap room for rent in Singapore, we’ve put together a guide on where to get the best rental deals. You can also read tips on how some renters have navigated the Singapore rental market in 2023 to secure a home for themselves.
For more property news, content and resources, check out PropertyGuru’s guides section.
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