After the pandemic, rental prices in Singapore skyrocketed to record highs. And if you rent in Singapore, you’ve probably already felt the impact of significantly higher rental prices. According to our Singapore Consumer Sentiment Study H1 2024, 85% of renters find rents too high. They are therefore looking for cheaper alternatives.
In this article, we examine how high rental prices have affected those renting in Singapore, as well as what we can expect from the rental market in 2024.
If you are looking to rent in Singapore, it is a good idea to keep up with the rental market and start looking early. As the saying goes, “The early bird catches the worm!”
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When will rental prices in Singapore drop?
In 2023, the big question for renters in Singapore was, “Will HDB and private property rental prices go down?” So the team at PropertyGuru took to the streets to find out what people think about the rental market in Singapore and summarised their opinions in a video.
For our CSS H1 2024 survey, we took a closer look at the sentiment around rental prices in Singapore. Since the video was made, the completion of BTO projects and condominium developments has dampened local demand and increased supply. In 2023, about 21,300 private homes (including ECs) were completed, marking the largest annual supply completion since 2016. It was only a matter of time before rental prices would come down.
Fast forward to 2024: The overheated rental market has cooled down, and we expect a gradual decline in prices this year. In the last three months of 2023, URA data showed that rental prices fell 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 shows that asking prices are gradually declining.
Rents are expected to continue to moderate as 18,500 private housing units are completed in 2024 and 2025.
Study: Most tenants believe rents in Singapore are too high
While the market is slowly shifting in renters’ favor, some had no choice but to sign their leases when prices peaked last year. Of renters surveyed from November 9 to December 12, 2023, 85% said rent prices were too high. 74% of renters experienced a sharp increase in rent prices when renewing their leases.
69% of Singaporeans expect rents to rise in the next six months. 47% expected rents to rise by 5% or more, with low-income earners (less than $5,000 monthly household income) more likely to share this view. Four in five therefore believe more can be done to help renters.
Although the rental market has softened, overall rental prices remain stable. Increased borrowing costs due to the high interest rate environment are partly causing landlords to keep their rental prices high. However, fewer respondents believe landlords are raising rental prices due to higher mortgage payments. As in the previous wave, 52% of landlords say they set their rental prices based on market prices in the same area and apartment size.
More and more tenants are reducing their rental budget
In line with higher rental prices in 2023, more of the renters surveyed reduced their spending to afford the new rental prices (from 34% in the first half of 2023 to 37% in the second half of 2023) and more looked for cheaper rental properties (38% in the first half of 2023 to 44% in the first half of 2024).
Higher living costs have also led to more people reducing their rental budgets, with 52% of low-income renters saying they only want to spend $500 to $1,000 on rent. In this price range, renters in today’s market can only afford a shared HDB room or a room in older HDB estates that are further away from the central business district.
Given the burden that rising rental costs are putting on young couples, the government has announced a rental voucher worth $300 per month for eligible families waiting for the completion of their BTO flats.
Dr Lee Nai Jia, Head of Property Information, Data and Software Solutions at PropertyGuru Group, confirms that the introduction of the Provisional Parenthood Housing Scheme (PPHS) (Open Market) voucher is good news for families in urgent need of housing.
Do you want to rent a property in Singapore in 2024?
In addition, according to our Singapore Property Market Report Q4 2023, the number of HDB rental listings on the PropertyGuru website has been steadily increasing in recent months. This follows the increased number of approved applications to rent HDB flats. There were 39,138 approved applications in 2023, compared to 36,166 approvals in 2022, representing an increase of 8.22% year-on-year.
“The increasing number of HDB rental offers is expanding options for families on a tight rental budget,” says Dr Lee Nai Jia.
In 2024, all signs point to rental rates falling. While there is a shift away from the landlord market, it is unlikely that rental rates will return to pre-COVID-19 levels. Rents will likely decline the most in less desirable locations and neighborhoods with an influx of newly completed units.
If you’re looking for a cheap room to rent in Singapore, we’ve put together a guide on where to find the best rental deals. You can also read tips on how some renters navigated the Singapore rental market in 2023 to secure a home.
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