With private rents harder hit by sluggish market conditions, it is no longer that much more expensive to rent a suburban condo than a large public flat.
Renting a suburban condo rather than a five-room Housing Board flat could have set you back an extra $1,000 in 2011, on average.
Yet doing so is just $500 more expensive today.
This is based on SRX Property data on median monthly rents for HDB flats and non-landed private residential units outside the central region, excluding executive condominiums.
In 2011, median suburban condo rents ranged from $3,100 to $3,300 each month. For HDB five-room and executive flats islandwide, the range was $2,200 to $2,600.
Suburban condos' rents have fallen to about $2,700 since the second half of last year. But HDB five-room and executive flats still fetch rents of $2,200 and $2,400 respectively.
Will tenants then switch to condos as the price gap closes?
Experts doubt so, pointing out that median rents do not reflect factors such as flat size. On a per square foot basis, the rental gap has not shrunk significantly.
Condo sizes have been shrinking over the years so tenants today may pay less simply because they rent smaller units, said experts.
Chris International director Chris Koh added that reduced rental allowances for expatriates could also be a factor.
The aggregate data could also disguise other differences such as location, said Suntec Real Estate Consultants director of research and consultancy Colin Tan.
"In a down market, tenants usually relocate from... a less central location to more central location."
Landlord Ian Tham, 49, is banking on his one-bedroom condo unit's central location near Dhoby Ghaut MRT. Nearby condo units still fetch rents of $3,100 to $3,200, he noted.
Yet, many potential tenants offer $2,500 or so for his. "Tenants are spoilt for choice now. But I'm not under pressure to rent this out so I won't accept a bad deal," he said.
The private rental market is expected to continue facing downward pressure. Experts said supply is expected to rise this year as more condos are completed and HDB upgraders seek to rent out their flats.
However, HDB rents are likely to continue staying afloat, as the pool of potential tenants is larger. "HDB flats enjoy demand from both S Pass and Employment Pass (EP) holders, whereas S Pass holders would probably not be able to afford to rent a condo," said OrangeTee research manager Wong Xian Yang.
The minimum monthly salary is $2,200 for an S Pass holder but $3,300 for an EP holder.
ERA Realty key executive officer Eugene Lim agreed, noting that HDB rental transactions rose 5.8 per cent in the first three months of the year, to 11,239 units.
This is also up from the same period last year.
"This shows the attractiveness of HDB flats," he noted.
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