As Singapore residential property prices look set to rebound following several years of decline, since its peak in 2013, many may expect rental prices to follow suit. While the rationale for this may be simple – higher property price must equate to higher rental prices (to offer a similar return on investment), the reality may be significantly different.
Property Markets In 2017
In 2017, private residential property prices increased close to 1.1% compared with a 3.1% decline in 2016. Looking further back, it is still down close to 9.5% from 2013.
On the other hand, resale prices for HDB properties has continued to decrease in 2017, by 1.5%. This takes its total decline to 9.0%, from its peak in 2013.
The rental market hasn’t completely matched these figures though. Despite the uptick in private residential property prices, rentals continued to decline in 2017, falling close to 1.9%. However, this was an improvement from 2016, when it declined 4.0% from the previous year.
For HDB flats, while this figure isn’t publicly given, a rough estimate showed that rents actually increased close to 7.3% in 2017.
The Top Five Most Expensive HDB Estates To Rent In Singapore
Based on HDB figures, Singapore’s five most expensive HDB rental estates, in ascending order, are:
#5 Toa Payoh
The fifth most expensive estate to rent an HDB flat in Singapore is in Toa Payoh. This should come as no surprise as more than five units in this estate sold for over the $1 million-mark in 2017, many others also approaching that mark.
Bishan is another hotbed for HDBs selling for over the $1 million-mark. In 2017, close to 13 HDB flats sold for over $1 million. This definitely translates into the premium that renters have to pay when leasing a flat in Bishan.
While Kallang/Whampoa isn’t as recognised as Toa Payoh and Bishan for its $1 million HDB flats, the town is very popular among east-siders. In fact, only one unit was sold for exactly $1 million in 2017.
However, as you can see, HDB flats in the town is generally able to fetch a higher rent than those in Bishan and Toa Payoh.
Queenstown is another one of those “hot” estates in Singapore that a stone-throw away from the CBD. In 2017, four units in the estate sold for over the $1 million-mark. While this is less than the 13 HDB flats sold over $1 million in Bishan, it shows that there is a difference between towns that people want to live in and those that they want to rent.
This also gives us a little insight into the fact that the demographics of people within the Bishan estate may be families who want to live there for the longer-term, while those who are renting in Queenstown might appreciate its central location more, but aren’t generally able to afford homes that cost over the $1 million-mark.
#1 Bukit Merah
Bukit Merah leads the pack when it comes to collecting premium rentals in Singapore. However, the surprising thing is that no flats sold for over the $1 million-mark in Bukit Merah.
Rents are generally a function of convenience, and this again shows that the demographics of residents in Bukit Merah may be very different to locations that command the highest-priced flats, such as Bishan or Toa Payoh.
You Could Live In Private Properties For A Lower Price
In fact, the rentals in some of these HDB estates are so high that renters could actually afford to live in condominiums and private apartments for a lower price, albeit typiaclly within other estates.
We logged into local property website 99.co just to check out whether renters could get a 3-Room condominium (which has just as many rooms as the 5-Room HDB flats) to check if any were being advertised for under $2,800.
There, in fact, many options available. This ranged from condominiums in Seng Kang, Pasir Ris and Choa Chu Kang to more centrally located ones in Macpherson, Hougang, Kembangan and even Bishan and Tanjong Pagar!
One differentiating factor could be that we are actually comparing HDB flats that rented for the highest amount, and are thus in high demand, to condominiums and private apartments that are being rented for the lowest amount, and thus are in low demand.
There could be many reasons for this, including size of the flats, convenience and amenities nearby as well as neighbouring tenants and occupiers.
When it comes to living in a property, little things could make a big difference.