Rents for HDB flats in Singapore continued to rise in the third quarter of 2022, with some residential areas seeing increases of as much as 50% compared to 2.5 years ago.

While landlords are undoubtedly happy with the trend, apartment seekers are far less so. With rents generally rising, can tenants continue to find affordable HDB flats? Or should those looking for a place to live take the plunge and buy a flat rather than rent on the open market?

Here’s how much HDB flat rents are, according to the latest Average HDB Rents by City and Flat Type report for Q3 2022.

Average cost of renting a HDB flat – 3-room, 4-room and 5-room

Source: Unsplash

The table above shows the range of median rents for 3, 4 and 5 room HDB flats. We have also provided a simple average for each category.

The rent for a 3-bedroom apartment is between S$2,000 and S$2,750 per month, with the average rent being S$2,280.

Four-bedroom apartments are now significantly more expensive than three-bedroom apartments; rents range from S$2,450 to S$3,500, but average at S$2,730.

In comparison, 5-bedroom apartments are not much more expensive than 4-bedroom apartments. Rents range from S$2,400 to S$3,600, but the average price is slightly higher at S$2,920.

Please note that the actual rent you pay will likely vary significantly from the averages above due to wide variations in location, amenities, age of the apartment, whether it has been recently renovated, and other factors.

A better benchmark might be to look at the HDB towns with the highest and lowest average rental prices.

Related topics: Rising rents: Who is affected and alternative solutions

Average HDB rental prices – Q3 2022

HDB towns with the highest average rents

Surprisingly, the undeveloped Punggol area recorded the highest average rent for 3-bedroom apartments, topping the list at S$2,750 per month, even higher than the sought-after Central area, where the average rent was S$2,600.

Other popular residential areas were Queenstown, Bukit Merah, Bishan and Clementi, where three-bedroom apartments had some of the highest average rents on the island.

The story continues

For 4- and 5-bedroom apartments, Central, Queenstown and Clementi proved to be the most expensive regions for renters, with average rents exceeding the three thousand dollar mark and reaching up to S$3,500 to S$3,600 per month. Other popular residential areas included Bukit Merah and Bishan.

At the same time, the Kallang/Whampoa and Geylang residential areas in the centre also saw high demand from tenants requiring larger apartments, as did Toa Payoh. These areas offered lower average rents, but were still easily accessible and close to the CBD.

Source: Unsplash

HDB towns with the lowest average rents

At the other end of the scale, we see that widely dispersed neighborhoods have the lowest average rental prices.

Bukit Batok, Bukit Panjang, Sembawang, Woodlands and Yishun remained the most affordable options for renters, although the greater distance from the city may make some hesitant. However, with average rents of S$2,000 to S$2,500 per month, these residential areas are an attractive option for those on a budget.

If you can get by with a 3-bedroom apartment, there are more centrally located alternatives – in Geylang, Hougang and Ang Mo Kio – but at rents that are S$200 or 300 higher.

At the same time, 4- and 5-bedroom apartments remain expensive, with average rents ranging between S$2,600 and S$2,800 even in less affordable areas such as Jurong West, Pasir Ris, Sengkang and Punggol.

Related: Want to buy a second-hand apartment in Singapore? Here are 6 things you need to check

Is it worth renting a HDB flat?

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This question reflects a long-standing debate in personal finance: Should you rent or own your home?

The core idea is that proponents of renting cite the lack of long-term financial commitment as the main advantage, while supporters of home ownership point to the long-term investment potential of real estate.

Both sides of the argument have merit and ultimately it comes down to your individual needs, financial situation and plans.

For those who want to move out alone but aren’t ready to buy an apartment, renting is the only real option. You can keep your housing costs low by renting a single room or sharing an apartment with a few roommates.

However, if you are planning a longer stay in Singapore, you should consider buying an apartment sooner rather than later.

This is because your monthly mortgage is likely to be lower than renting an entire apartment due to the various government grants available, so the longer you live in rented accommodation, the worse your financial situation becomes.

In addition, you can always consider renting out your property to generate passive income if you ever decide to move to another country (make sure you check the rules and regulations for renting out your HDB flat!).

Calculate your budget

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Whether you choose to rent or buy your HDB flat, the most important thing is that you do not spend too much on accommodation.

As a general rule, you should try to keep accommodation costs below 30% of your gross income – and adjust them downwards as your income increases to avoid falling victim to lifestyle creep.

Calculate your budget with our handy mortgage calculator or read our reviews of the best mortgages in Singapore for a detailed overview of housing costs in Singapore.

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Source cover photo: Unsplash

The article originally appeared on ValueChampion. ​ ValueChampion helps you find the most relevant information to optimize your personal finances. Like us on our Facebook page to stay updated with our latest news and articles. ​ More from ValueChampion: ​ Best Mortgage Loans in Singapore 2023

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