In the world of Singapore real estate, where a hawker stall renting for $6,111 a month might have already raised eyebrows, there’s now a new benchmark in the public housing sector.
A five-room HDB flat in Tanjong Pagar Plaza is being rented out for a staggering $7,600 per month.
A recent market report from the online property portal PropertyGuru indicates that rental demand in Singapore has decreased by 10.4% quarter on quarter in the third quarter of this year.
This decline has been observed across all segments of the residential market, with landed homes experiencing the most significant drop in demand.
Why this trend? Well, those who could afford to spend $7,600 on renting a landed property seem to have opted for a five-room HDB flat in Tanjong Pagar instead.
Okay. Jokes aside.
This shift in preference might be attributed to the increasing value proposition of landed homes amid an uncertain economic climate, underscored by their scarcity and limited supply.
Alongside areas like Tanjong Pagar Plaza and Old Airport Road, five-room HDB flats have been setting new records with rents surpassing $7,000.
Notably, a five-room unit in Block 11 Pine Close, near the Old Airport Road Food Centre, was rented out for $7,400 in September.
Another five-room unit, this time in Block 2 of Tanjong Pagar Plaza, fetched a monthly rent of $7,600 last month.
Block 2 Tanjong Pagar Plaza comprises 200 units, with only 10 being five-room flats.
Residents have reported that these five-room units are actually the result of combining two three-room flats.
This configuration results in four bedrooms, two living rooms, two kitchens, and two bathrooms, providing a substantial living space, as covered by Shin Min Daily News.
Ms Christine Sun, Vice President of Research and Consultancy at OrangeTee & Tie, highlighted that the Tanjong Pagar Plaza unit’s large living space and central location make it attractive for several working professionals to co-rent.
The recent relaxation in HDB occupancy rules, effective from 22 Jan next year, will allow more unrelated individuals to cohabit in the same HDB flat or even bedroom, increasing from the current limit of six to eight people in a four-room or larger HDB flat.
This change could significantly incentivise co-renting, leading to potential savings on rental costs.
The Pine Close location, close to the Old Airport Road Food Centre and surrounded by private residences, indicates that tenants might be considering a move from private to public housing, possibly due to the 15-month waiting period for private housing.
Mr Nicholas Mak, Chief Research Officer at real estate website MOGUL.sg, noted that combined five-room units like those in Tanjong Pagar Plaza are a rarity.
Transaction data reveals that only one five-room unit was rented out in the block throughout the year, suggesting a scenario where demand surpasses supply.
Located in the heart of the Central Business District (CBD), Tanjong Pagar’s public housing units are a rare find.
Consequently, many tenants opt for nearby options like Dawson Skyville HDB flats.
The median monthly rent for a five-room unit in Dawson Skyville this year was $5,200.
Meanwhile, in Pine Close, rental transactions range from $2,000 to over $4,000 per month, making the $7,400 and $7,600 rents in these areas exceptionally high.
