Renting a Senkang flat and living in Senkang

This January I have left Bedok for Senkang. The landlord of my rental HDB flat was increasing the rent from 2,600 SGD per month to 2,700 SGD per month. I have a friend who lives in a rental flat in Dakota and has successfully convinced his landlord that he would leave the house if he would increase the rent (his rent is 2,700 SGD per month). Mine was not even listening so I moved out.

Bedok is quite far to city and is an old HDB estate. Although it is mature in terms of amenities, the flats are old and expensive. Since the opening of Changi Business Park, more bank offices moved to East and there are many IT professionals with deep pockets. Many also look for a place as a group so it is hard to compete with 4-5 salaries with a family budget. So, rents are quite high in Bedok and we do not have any reason to pay the premium, I work in city center and my wife is at home now looking after our baby.

So we have decided to leave our rental flat and Bedok. After looking at several locations, price and flat quality wise, Senkang shined. Senkang is known to be far away neighbourhood and is definitely a non-mature estate. I was thinking about the area because I am planning to buy a resale HDB and I do not want to pay COV (Cash over valuation). In Senkang and Pungol, COV is zero or negative. I wanted to rent there a year before going for a purchase and I knew the rental prices were lower.

My wife was reluctant to move from Bedok and even to look at HDBs in Senkang. But after we have seen several rental flats, we were not even looking flats outside Senkang! Very new HDB blocks full of condominium like HDB flats with rentals cheaper than mature estates! We have later found a flat for 2,400 SGD per month (3600 SGD per year cheaper than the one in Bedok). But the price is not the only appeal. The flat is new and interior design is just great. Much better than the one in Bedok.

I have been living in Senkang for a few months now and I have lived here enough to see that those so-called non-mature estate disadvantages are highly exaggerated. Senkang is only 10 minutes more to commute to my work place in Tiong Bahru, compared to Bedok. Although amenities are less, there are still plenty and we have everything from hawker centers to food courts. One suprising thing was that we need less taxi from our Senkang place to city center compared to our Bedok flat. We also do not go to city a lot. The reason is the NEX in Serangoon. In Bedok and near Bedok, there is no big shopping mall as NEX.

A warning, we need less taxi here and taxis are also hard to find in Senkang. It is quite a norm here to wait for a taxi for an hour even you are calling.

Senkang Town center and Compass Point Shopping Mall

And the rental prices in Senkang are falling. As I write this, a flat similar to mine was going for 2,300 SGD per month. As months pass-by, large number of BTO flats complated 5-years ago are entering the resale and rental market.  2009 and 2010 onwards, new BTO flat constructions were quite high and they will enter the market by large numbers.

Actually this must be an island wide trend in Singapore. Last time I looked for a rental flat was in 2012 and at that time, agents were taking groups of tenants (I mean an agent was taking groups of tenants at the same time)  to flats and the landlords were not even talking to you if you wanted to negotiate. Now, no more tenant group visits and also landlords are more willing to negotiate 10-15% discounts. Asking prices are also more reasonable.

Here are some tips in renting an HDB flat in Senkang:

- Try to rent near Senkang MRT Station (where there is also a mid-size shopping mall named Compass Point) or near LRT stations. There are many new and nice HDB blocks right next to LRT stations which makes commuting quite easy.
- HDBs near Senkang Sports and Recreation Center are great places to rent a flat. This place is like a water park!
- Try to look for rental in The Straits Times classified. There are more landlord agents and senior property agents there then online sites.
- I usually save on property agent fee when I am renting. When you call the agent, just ask him whether he/she is a landlord agent or tenant agent. Talk further to landlord agents. They get their commission from landlord so you do no need to pay property agent fee if you work with them. I worked through tenant agents before. They just behave as message relay service between you and landlord agent and when there is a conflict, they have little use (they usually behave like they do not have any responsibility on the transaction). And for doing almost nothing they get half the rent every year (even if you extend your rent on the same unit, they still get commission from you).

Pipeline Supply of New Residential Units in Singapore

National Development Minister Khaw Boon Wan has posted the below chart in his Facebook. According to the post 204,461 units of residential property will be ready for occupation in 2014, 2015 and 2016. This is is 3.4% larger than the earlier projection of 197,559:

We are making good progress in our ramp-up of home building programme. The number of new public and private residential units ready for occupation in the next three years is increasing. Our earlier projection (197,559) has been outstripped. The new number now is 204,461. For this year, more than 21,000 residential units have already been built; another 9,220 units will be ready by year end.

Source : Khaw Boon Wan's Facebook Page

According to the graph 65,383 units of private residential properties, 10,435 units of Executive Condominiums and 97,551 units of HDB's will be completed in the next 3 years. Most of the flood is expected in 2016 where 73,628 units of properties will be completed.

It seems like a flood of property supply will come to the Singapore market. The Facebook post followed the news that HDB Resale Price Index (RPI) fell by 0.9 per cent in the third quarter of this year. This was a slightly bigger drop than the flash estimate of 0.7 per cent released earlier this month. The last time resale flat prices dipped was at the start of 2009, when the recession hit. Prices have been on the upward trend since and reached a peak in the second quarter of this year, when prices went up by 0.5 per cent.

Pipeline Supply of New Residential Units in Singapore

How to not pay property agent fee when renting a flat in Singapore?

Elbert is renewing his contract in the HDB flat he is renting. As he did every year, he will need to pay agent fee to the agent although he is not finding a new flat. He will simply continue in the flat he is renting but he will still need to pay for it anyway. He is not alone. I think this bizarre setting is a common in Singapore but there is a way to avoid it for tenants. Actually, the renting tip I will share here is also used when you are renting a new unit.

There are 2 types of agents in Singapore : landlord agents and tenant agents. By law an agent cannot charge agent fee from both parties. If you do not want to pay for property agent fee when you are renting a place, look for landlord agents and directly deal with them. Finding them is quite easy: just ask the agent when you call. I ask "are you landlord agent?". If the property agent you call ask you "are you an agent or tenant looking for a place?" he/she is probably a landlord agent.

I have rented my current unit like that. A new (6 years old at the time) HDB flat for 2,500 SGD per month. I found the landlord agent and directly dealed with them. So I have saved 1,250 SGD from the transaction. Later when I renewed my contract I did not pay agent fee also.

But isn't there a drawback? If a dispute arises you won't have a tenant agent to help you? Well even if you used an agent on your side in the transaction, this agent will not care a bit about your dispute with your landlord anyway. So it is not a big deal not to have a tenant agent. 

HDB Rents in Singapore up in Q3 2012

If you are looking for an HDB to rent in Singapore, yesterday brought some bad news. The rental prices, already ridiculously high compared to a few years ago, are still climbing on the shoulders of supply crunch, runaway private property prices and several cooling measures which has actually fired up the prices in the HDB segment.

According to HDB's Q3 2012 median HDB rental transactions data released yesterday, island wide, the per month rental for a 4 room (3+1) HDB flat has jumped 2.2% compared to Q2 2012 and it is 8.2% higher on average compared to a year ago (Q3 2011). The story was not much different for 3 room (2+1) HDB rental flats. The rental cost jumped 2.2% quarter-on-quarter and 8.8% year-on-year.

According to HDB data for Q3 2012, rental transactions rose by about 4% from 6,891 cases in 2nd Quarter 2012 to 7,142 cases in 3rd Quarter 2012. The total number of HDB flats approved for rental also rose to 42,920 units in 3rd Quarter 2012, compared to 41,814 units in 2nd Quarter 2012. But although the supply of rental units are rising, the demand is rising faster. Previous private property tenants who shift to HDB flats for cheaper rentals, increasing influx of foreign workers is creating a huge demand.

Here is a summary of HDB rentals by room type.

4 room HDB rents
The highest quarterly jump in 4 room (3+1) HDB rents were in Geylang (13%) followed by Bukit Merah (5.4%), Bukit Panjang (5%), Sembawang (4.9%) and Bedok (4.9%). As of Q3 2012, following HDB towns are the most expensive towns to rent a 4 room flat:

1 - Bukit Merah - $2,950 per month
2 - Queenstown - $2,900 per month
3 - Central         - $2,800 per month
4 - Toa Payoh   - $2,600 per month
5 - Clementi      - $2,600 per month

Bukit Panjang and Woodlands were the HDB towns to find the cheapest HDB rental prices (on average) followed by Sembawang:

1 - Bukit Panjang    - $2,100 per month
2 - Woodlands        - $2,100 per month
3 - Sembawang       - $2,150 per month
4 - Yishun               - $2,200 per month
5 - Choa Chu Kang - $2,250 per month

Not all HDB towns recorded rental price increases. For tenants there were also bright spots like Serangoon which recorded a 4% q-o-q decline (but still 4.3% increase year-on-year). Bishan and Queenstown also recorded q-o-q declines.

Rental prices in Bishan for 4 room flats have not changed compared to previous year.

HDB for Rent Prices (4 Room / (3+1) HDB Flats)
HDB Town	Q3 2012	Q2 2012	Q3/Q2 2012	% Q3/Q2 2012	Q3 2011	Q3 2012/11	% Q3 2012/11
	2,425	2,374	51	2.2%	2,241	184	8.2%
ANG MO KIO	2,400	2,400	0	0.0%	2,300	100	4.3%
BEDOK	2,400	2,300	100	4.3%	2,150	250	11.6%
BISHAN	2,500	2,550	-50	-2.0%	2,500	0	0.0%
BUKIT BATOK	2,300	2,230	70	3.1%	2,120	180	8.5%
BUKIT MERAH	2,950	2,800	150	5.4%	2,650	300	11.3%
BUKIT PANJANG	2,100	2,000	100	5.0%	2,000	100	5.0%
CENTRAL	2,800	2,800	0	0.0%	2,500	300	12.0%
CHOA CHU KANG	2,250	2,200	50	2.3%	2,100	150	7.1%
CLEMENTI	2,600	2,550	50	2.0%	2,300	300	13.0%
GEYLANG	2,500	2,200	300	13.6%	2,400	100	4.2%
HOUGANG	2,400	2,300	100	4.3%	2,100	300	14.3%
JURONG EAST	2,300	2,300	0	0.0%	2,200	100	4.5%
JURONG WEST	2,380	2,350	30	1.3%	2,180	200	9.2%
KALLANG/ WHAMPOA	2,500	2,500	0	0.0%	2,400	100	4.2%
PASIR RIS	2,300	2,300	0	0.0%	2,150	150	7.0%
PUNGGOL	2,300	2,300	0	0.0%	2,000	300	15.0%
QUEENSTOWN	2,900	2,950	-50	-1.7%	2,700	200	7.4%
SEMBAWANG	2,150	2,050	100	4.9%	2,030	120	5.9%
SENGKANG	2,350	2,300	50	2.2%	2,200	150	6.8%
SERANGOON	2,400	2,500	-100	-4.0%	2,300	100	4.3%
TAMPINES	2,400	2,350	50	2.1%	2,200	200	9.1%
TOA PAYOH	2,600	2,500	100	4.0%	2,300	300	13.0%
WOODLANDS	2,100	2,050	50	2.4%	2,000	100	5.0%
YISHUN	2,200	2,190	10	0.5%	2,000	200	10.0%

3 room HDB rent
Most expensive place in Singapore to rent a 3 room (2+1) HDB flat was central region where you need to pay 2,400 SGD per month. HDB for rent in Marine Parade was the second most expensive place:

1 - Central             - $2,400 per month
2 - Marine Parade  - $2,300 per month
3 - Queenstown      - $2,200 per month
4 - Bukit Merah      - $2,200 per month
5 - Bishan               - 2,000 per month

3 room HDBs for rent in Woodlands are the cheapest now:
1 - Woodlands        - $1,700 per month
2 - Yishun               - $1,800 per month
3 - Jurong West      - $1,800 per month
4 - Bukit Panjang    - $1,800 per month
5 - Bukit Batok       - $1,900 per month

3 room HDB rental prices has not changed in Woodlands compared to last year Yishun and Bishan recorded q-o-q decrease.

HDB for Rent Prices (3 Room / (2+1) HDB Flats)
HDB Town	Q3 2012	Q2 2012	Q3/Q2 2012	% Q3/Q2 2012	Q3 2011	Q3 2012/11	% Q3 2012/11
	2,009	1,966	44	2.2%	1,847	163	8.8%
ANG MO KIO	2,000	2,000	0	0.0%	1,850	150	8.1%
BEDOK	2,000	1,950	50	2.6%	1,800	200	11.1%
BISHAN	2,000	2,050	-50	-2.4%	1,900	100	5.3%
BUKIT BATOK	1,900	1,900	0	0.0%	1,800	100	5.6%
BUKIT MERAH	2,200	2,100	100	4.8%	2,000	200	10.0%
BUKIT PANJANG	1,800	1,800	0	0.0%	1,700	100	5.9%
CENTRAL	2,400	2,300	100	4.3%	2,200	200	9.1%
CLEMENTI	2,100	2,000	100	5.0%	1,900	200	10.5%
GEYLANG	1,950	1,930	20	1.0%	1,880	70	3.7%
HOUGANG	1,900	1,800	100	5.6%	1,800	100	5.6%
JURONG EAST	2,000	1,800	200	11.1%	1,700	300	17.6%
JURONG WEST	1,800	1,800	0	0.0%	1,600	200	12.5%
KALLANG/ WHAMPOA	2,030	2,000	30	1.5%	1,800	230	12.8%
MARINE PARADE	2,300	2,200	100	4.5%	1,950	350	17.9%
QUEENSTOWN	2,200	2,200	0	0.0%	2,000	200	10.0%
SERANGOON	2,000	1,950	50	2.6%	1,800	200	11.1%
TAMPINES	2,100	2,000	100	5.0%	2,000	100	5.0%
TOA PAYOH	2,000	1,980	20	1.0%	1,800	200	11.1%
WOODLANDS	1,700	1,700	0	0.0%	1,700	0	0.0%
YISHUN	1,800	1,850	-50	-2.7%	1,750	50	2.9%

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35,000 private flats will be completed in 2013 and 2014

If you are renting your accommodation in Singapore and tired of ridiculously high rental problems, there may be a relief in horizon. A huge supply of 35,000 private flats will be completed in 2013 and 2014. This will add a lot of rental units in the market where rents and prices were increasing non-stop since 2009.

The number of completed private flats is increasing every year since 2009. In 2010, 9,900 units were completed. In 2011, this number was 11,700 and in this year, 12,500 units will be completed.  Most of these units, almost 10 percent, will be completed in Bedok planning area which is followed by Geylang, Hougang, Newton and Novena. The final numbers may be as large as 40,000 since the good property sales of these days may bring many projects forward and result in early completion.

Currently, Singapore is the ninth most expensive city to rent property in the world, and third most expensive city in Asia. This is despite a moderate increase in the prices in 2011. Average rent for an unfurnished 4 room (3 bedroom) apartment in Singapore rose 3% in 2011 in Singapore dollar terms, one of the lowest in the region. In 2010, rents rose over 10%.

And even before the supply flow hit the shores, it is already a renters market in Singapore so bargain hard to lower the asking rental prices. According to Rent in Singapore web site, as of October 2012, it is pretty much a renters' market in Singapore. Rentals have been under pressure lately because of the recent worldwide economic downturn and a supply flow of new apartments coming online in 2012, 2013 and 2014.

If condo rents in Singapore is hurting your budget, you can choose to rent an HDB instead of a condo which is much cheaper and larger with the same price (See It makes more sense to rent HDB instead of Condominium).

[1] - Singapore among world’s most expensive cities to rent property
[2] - Frequently Asked Questions about renting a home in Singapore

HDB Rental Prices jumped in Q2 2012

After breathing briefly in Q1 2012, HDB rent prices continued to increase in the second quarter of 2012. Renting a 4-room HDB flat now costs 2,374 Singapore Dollars per month, a 6% jump from 2,238 SGD per month of Q1 2012. There was also a dramatic jump for 3 room flats from 1,841 SGD per month of Q1 2012 to 1,966 SGD per month of Q2 2012 (almost a 7% jump).  Year on year change in the rental prices for HDB flats was 13% for 3-room flats and 12% for 4 room flats.

These numbers are from HDB's Median Subletting Rents by Town and Flat Type web service from where you can follow actual transaction prices for HDB flats. As of second quarter of 2012, the cheapest 5 towns to rent a 3-room HDB flat were:
1 - Woodlands  - $1,700 SGD per month
2 - Jurong East  - $1,800 SGD per month
3 - Jurong West - $1,800 SGD per month
4 - Bukit Panjang - $1,800 SGD per month
5 - Hougang - $1,800 SGD per month



As of second quarter of 2012, the cheapest 5 towns to rent a 4-room HDB flat were:

1 - Bukit Panjang - $2000 per month
2 - Sembawang - $2050 per month
3 - Woodlands - $2050 per month
4 - Yishun - $2190 per month
5 - Geylang - $2200 per month

Some towns are playing to the $3,000 per month level. The most expensive town to rent a 4 room HDB in Singapore is Queenstown now with $2,950 per month, a jump from $2,600 per month. Bukit Merah ($2,800 per month), Central ($2,800 per month), Clementi ($2,550 per month) and Bishan ($2,550 per month) are the most expensive places now to rent a 4 room HDB flat.

Median HDB rental by unit type per quarter - Source : HDB

   As you can see from the graph here, HDB rents became more and more expensive since 2007. Just 5 years ago, average rental price for a 4 room flat was below 1,500 SGD. Today even 2,000 SGD per month will not be enough for a super old HDB in a vertical slum. 

HDB restricts Singapore PR flat owners' to rent their flat only for 1 year

A new cooling measure for Singapore property market has come from Housing Development Board (HDB) today as a revision to the subletting rules on the public housing flats. With immediate effect, flat owners with Singapore Permanent Residents (PRs) status will only be allowed to sublet their HDB flats for one year, down from the current three years:

“Under the revised rule, SPR flat owners will be allowed to sublet their flat after meeting the MOP, if they have not sublet the flat before. The approval will be granted for 1 year only, instead of 3 years. Upon expiry of the 1-year period, the application to extend the approval will be assessed on a case-by-case basis and approval will be granted only if there are extenuating reasons. The total period of subletting during the flat owners' entire duration of the flat ownership is capped at 5 years.

The revised rule is to reinforce the policy intent of providing HDB flats as homes to SPRs, and to deter those who are buying the flats for rental yield or investment. While HDB allows SPR owners who have met the MOP to sublet their flat, the subletting should be on a temporary basis. If the SPR families no longer need the flats for their own occupation, they should sell the flat instead of subletting them.”

Source : HDB Steps Up Enforcement against Unauthorised Subletting and Revises Subletting Rule for SPRs

The new rules has come a week after the news of continued price increase for resale HDB in Q2 2012:

Resale HDB flat prices have inched upwards yet again, this time by 1.3 per cent in the second quarter of this year, according to the Housing Board's flash estimates released on Monday.

This resurgence comes on the back of a downward trend in the two previous quarters.
Source: Resale HDB flat prices up 1.3% in Q2 this year

According to the evening news, there are 2,100 Singapore PRs renting out their flats at the moment and this makes 5 per cent of all HDB flats rented out. According to ERA, there is an increased trend of Singapore PRs renting out their HDB flats with 60 PRs renting out their HDB flats every month.

Singapore Permanent Residents are allowed to buy public housing flats, called HDB flats here, from the secondary market (resale flats) and were allowed to sublet them as Singapore Citizens. According to Ministry of National Development blog’s “Who Buy Resale Flats?” article, around 20% of the resale HDB flats were bought by Singapore PRs in 2010.

Profile of resale HDB flat buyers - Source : Housing Matters Blog

Although many Singapore PRs buyers are owner occupiers who buys to stop paying very high rental prices, these measures may have effect on the resale flat prices since having a very expensive flat without an option to rent them out will be discouraging for Singapore PRs to buy an HDB flat.

Average HDB Rental Prices in Singapore

If you are looking for an affordable flat to rent in Singapore, you should eye on HDB flats. Although these flats are public flats meant for accommodation of Singaporeans, they can be rented out with an approval from Housing Development Board (HDB) to Singaporeans, Singapore PRs and foreigners with valid work visas. They are relatively affordable compared to private properties which are currently ridiculously expensive to rent.

When we say relatively affordable, we mean really relatively because HDB flats are also far from being really affordable to rent. Renting an HDB flat became increasingly expensive by every passing year since 2007 to a level where an HDB in relatively good shape is 2,000++ SGD per month to rent .

Just 4 years ago in the first three months of 2008, renting a 3 room HDB flat would cost the tenant around 1,300 SGD per month. As of the first three months of 2012, it costs 38 % more: 1840 SGD per month. As you can see from the graph below, the situation is also same for a 4 room (3+1) HDB flat rental. In 4 years, the median rental increased from 1,663 SGD per month to 2238 SGD per month, a 34 % increase.

4 room HDB rental prices between 2007 - 2012

  
The good news is that, as you can see from the graph, the non-stop increase in rental prices since the second quarter of 2009 has stopped in the last quarter of 2011 and first quarter of 2012 and median rentals have not increased first time in the last 2 years. In fact, in 3 room flat types, the average rental prices has marginally fell from 1888 SGD per month to 1841 per month quarter on quarter in Q1 2012. All towns except Marine Parade, Serangoon and Woodlands recorded a decrease in median rental for 3 room flats.

3 room HDB rent per town Q1 2012

If you want to pay the lowest rent possible, the cheapest places to rent HDB flats were Bukit Panjang ($1,600) followed by Woodlands ($1,650), Yishun ($1,700), Jurong East ($1,700) and Jurong West ($1,700) for 3 room (2+1) flats. For larger 4 room flats (3+1) the cheapest places in terms of rent were Yishun, Woodlands, Bukit Panjang and Jurong West with median rental of $2,000 per month. The good news is that the median rent in these towns for 4 room HDB flat fell from $2,100 in last quarter of 2011.

Q 2012 Top 10 Cheapest Places To Rent a 3 Room HDB Flat
S/N	HDB Town	Median Rent
1	BUKIT PANJANG	$1,600
2	WOODLANDS	$1,650
3	YISHUN	$1,700
4	JURONG EAST	$1,700
5	JURONG WEST	$1,700
6	BISHAN	$1,750
7	BUKIT BATOK	$1,750
8	BEDOK	$1,780
9	KALLANG/ WHAMPOA	$1,800
10	ANG MO KIO	$1,800

Marine Parade, Bukit Merah, Clementi, Central area and Queenstown are the most expensive places to rent an HDB flat with median prices to rent a 4 room HDB flat hovers above 2,400 SGD per month.

Q1 2012 - Top 10 most expensive towns to rent 3 Room HDB Flat
	Town	Median(Rental)
$1	CENTRAL	$2,200
$2	MARINE PARADE	$2,100
$3	BUKIT MERAH	$2,000
$4	CLEMENTI	$2,000
$5	QUEENSTOWN	$1,930
$6	GEYLANG	$1,900
$7	TAMPINES	$1,900
$8	TOA PAYOH	$1,900
$9	SERANGOON	$1,850
$10	KALLANG/ WHAMPOA	$1,800

Median HDB flat rental prices as of Q1 2012

It seems like the continuous rally of HDB rental prices since the second quarter of 2009 is loosing its steam as the latest median rental data shows that rental price increase has slowed down for 5 room flats, at a plateau for 4 room flats and decreased for 2 room flats.

The rents for 3-room HDB flats has fell 2.4% in Q1 2012 compared to the previous quarter. The rents for 4-room flats have stayed relatively stable for a third quarter in row with only 0.4% increase in the last quarter. Rent increase for 5-room flats also came to a halt following sharp increases in the last few years.

Island wide median rental for 3-room flats decreased first time since third quarter of 2009 and is currently is about 1841 SGD per month. The rents of 4 room flats on the other hand slightly increased from 2229 SGD per month in Q4 2011 to 2238 SGD per month in Q1 2011. 5 room flat rentals continued to increase, albeit with a slower pace to 2476 SGD per month.

As we have written before median HDB rental prices in Singapore are published by HDB quarterly. Below chart shows the price trends for 3 most popular flat types, 3 room flats (2+1), 4 room flats (3+1) and 5 room flats.Median price means half of the sampled prices are below the median and half of the sampled prices are above the median.

As the price increases, more and more HDB flats are released for rent and as a result the number of Housing & Development Board (HDB) flats being sublet has more than tripled in the past five years:

"The reasons include the relaxation of subletting rules, and an increase in foreigners. With more HDB home-owners using their flats to earn rental income, some analysts are concerned this will lead to a shortage of supply in the resale market. The number of HDB flats on the rental market has shot up from about 12,500 in 2006 to 40,026 in 2011."[1]

The slowdown in price rise may be due to several factors such as increased supply, less foreigner demand for rental units and price resistance of tenants to further price increases.

[1] - More subletting HDB flats

More HDB flats for rent in Singapore

If you are looking for a place to rent in Singapore, public housing flats called HDB, are the most cost effective and the best value-to-price alternatives compared to over-expensive private housing units. Luckily, the supply of these units has more than tripled in the past five years – from 12,500 in 2006 to 40,026 units:

“The number of Housing & Development Board (HDB) flats being sublet(*) has more than tripled in the past five years. The reasons include the relaxation of subletting rules, and an increase in foreigners. With more HDB home-owners using their flats to earn rental income, some analysts are concerned this will lead to a shortage of supply in the resale market. The number of HDB flats on the rental market has shot up from about 12,500 in 2006 to 40,026 in 2011.

Previously, flat owners could only lease out their flats if they could show proof they had been living overseas for a certain period of time.  Since 2003, the HDB has gradually brought down the minimum occupation period (MOP) after which owners can sublet their flats. Currently, the MOP is five years for both new and resale flats, regardless of whether they are bought with a government grant.”

The actual number of HDB flats in the market is probably higher than these figures because there is also an under-the-radar subletting practice called “one room locked”.  HDB owners who do not have approval from HDB to rent the whole unit may rent the unit anyway by locking a room with his belongings. In this case when asked, he/she can say that he did not rent the unit and he still stays in the unit and he has just rented out several rooms. (For this reason you should always request for the approval letter for the unit from HDB owner before leasing it. If you are caught staying in a unit like this, you will be given a very short notice to leave!)

But the demand is increasing as well with increasing condominium rental prices, increase number of foreign workers and shrinking expatriate housing allowances:

“One relocation company, Orientations, said the number of expatriates opting to rent an HDB flat has gone up by 30 per cent, between 2010 and 2011. Many of them are mid-level professionals from Asia who are receiving smaller housing allowances compared to previous years. (**)  Orientations chairman Beverly Mayhew noted that the amenities in some public housing estates - such as swimming pools, transport hubs and recreational centres - make them very appealing to foreigners.”

Renting an HDB has many advantages over condominiums.  A large 3+1 (or 4 rooms flat) within 100 meters of a major MRT station can be rented for 2300 – 2400 SGD per month. Although this is expensive, it is much cheaper than 4,000++ SGD per month you would pay to a condominium which has the same location advantage. As many foreigners with valid working visas can rent an HDB flat, it is natural that the number of expatriates renting HDB increases (See also It makes more sense to rent HDB instead of Condominium).

One of the reasons that make newcomers shy of renting an HDB is privacy. Pre-BTO flats tend to have their common corridors on the outer side of the building and the living room and several rooms look to these common corridor. So anyone passing through corridor can see inside these rooms if curtains are not down. But this is not the case with new generation BTOs built in the last decade. These new flats have their common corridors inside the building and all their rooms looking outside the building.

Artist's impression of one of the new projects, Anchorvale Harvest. After this BTO flat is completed, it will require 5 years of MOP (Minimum Occupation Period) before its flats enter HDB rental market except the units approved as special cases - Source : Anchorvale Harvest Facebook Page

Some property experts believe that the high rental yields have made owners to rent instead of sell which adds to the severe supply shortage of HDB flats. And they suggest some intervention. I do not agree with them. If everything is legal, it makes perfectly sense to let owners to draw maximum return from their property as they wish, either by renting it out or sell it.  PropNex CEO Mohd Ismail says:

"I think we should not interfere and tweak with the rental amount, and I think it's perfectly all right if the market is prepared to pay such an amount, and people who have owned such properties and have legally occupied them, that's a form of return on their investments."

[1] - More subletting HDB flats

(*) – You may wonder why renting out an HDB is referred as sublet/sublease rather than leasing. This is because all HDB flats are 99 years leasehold properties ultimately owned by Housing Development Board.

(**) - As far as I know many of the mid-level professionals from Asia do not receive housing allowances at all.

Rented a flat at last!

I have finally found an HDB flat for rent after looking for an HDB flat for months. Although the price was higher than I was planning to pay, at least the unit was deserving it. As I have written before, it was a very frustrating process at the beginning thanks to the new lows of Singapore property agents but luckily I have started very early to look for one and did not have to end up with an inferior but expensive unit. Big bonus was that at the end, I did not pay a penny to any property agent.

Do not get me wrong: I advise you to work with a licensed property agent if you are looking for a place to rent, especially if you are new to Singapore. if you do not know what you are doing, you may end up with a rental scam. But if you are new here you should also know that for every good property agent out there, "there are two more that make parasites look good by comparison".

Anyway, I have realized that not all the steps involved and items to be careful about are written in a single place so I will write a check list here to rent a flat in Singapore.

1 - Find a good property agent. This is important and based on my own experienced best are found by reference. Ask to your friends and colleagues to find one which they worked and liked the service. Second best option is the newspaper classified pages and I personally stay away from big property portals. Check How to find a good property agent in Singapore for details.

2 - Find a landlord property agent. This is the best you can get. It involves an agent and you also do not pay for the agent fee. In Singapore a property agent cannot represent both sides and collect money from both sides. The landlord agents usually start with an ad in newspaper or internet and tenant agents find them. Be the one finding them. But doesn't it mean that he/she will protect landlord's interest and will not care about yours? Well first, your friendly tenant agent will probably not care about your interest. Second, this is usually not the case. I have rented my new flat like this and although I have worked with a very good agent which did a very good job even for our side. And 2 months before, one of my colleagues rented a very reasonable 2+1 HDB for a very reasonable price (1,700 SGD per month) on Bedok Reservoir Road through an agent and although her agent was also good, landlord's agent was great. Simply call the ad and ask whether the agent is working for landlord or a tenant agent. You can save thousands if you can find a landlord agent.  Refer How to rent a flat in Singapore without paying property agent fee? article for details.

3 - Check the license of the agent. This is very easy and sure way that you will not have any big problem like falling into a scam and if things go wrong, you will have a legitimate party to blame. You can do it online and make sure that the man/woman on the photo in the web site is the one you are engaging with. See  How to avoid rental scam in Singapore for details.

4 - Avoid rental scams. Here is an article that lists a checklist from Singapore Police to avoid rental scams. Renting a flat without agent is possible but if you want to follow that way make sure everything is checked.

5 - Follow the procedures of renting a property in Singapore. After we have viewed the flat and decided to rent it, we have visited it for a second time to check if everything is in working condition and there is any major problem in the house. This is important before the next step is giving a letter of intent. You should list any request you have from the landlord (in our case the washing machine was just ultra old so we have requested them to change it which they have accepted) there.

Next, we have signed the tenancy agreement.  I have heard people signing tenancy agreement without letter of intent right away but usually these 2 steps are followed. You should not pay any deposit until the tenancy agreement is signed. If you will pay the deposit at the time of the tenancy agreement signing, do not pay cash but use check. If you do not have check, you can get a one time check from the bank which costs $5 only for admission fees.

You should also not pay the rent until keys are handed over to you. Again pay by check if the bank transfer is not possible. Do not pay cash without documentation. If you have also not done until now, go around the house with agent or the landlord and make sure to document all defects before getting the keys. Other than documenting we have also photographed them and mailed to the agent. It is important to look at the details and make sure that the air conditioning units, television, refrigerator, washing machine and etc. are working.

HDB rent in Bukit Merah/Red Hill Singapore

Bukit Merah, meaning red hill in Malay, is a central region location in Singapore. Although Bukit Merah means red hill, Redhill and Bukit Merah are two different areas next to each other. Redhill is the area in the vicinity of   Redhill MRT Station on East West Line while Tiong Bahru MRT Station serves Bukit Merah vicinity. Bukit Merah takes its name from a hill here, which was much larger in the past but later trimmed down to its current size in 1970s.

As of 3rd Quarter 2011, Bukit Merah is the second most expensive place in Singapore to rent an HDB flat with average of 2,650 SGD per month for a unit rental. The area is very near to city center and easily accessible with MRT and bus. A 3 room HDB flat in Bukit Merah (2 bedroom + 1 living room or 2+1) requires 2,000 SGD per month while a 4 room HDB flat (3 bedroom + 1 living roon or 3+1) requires 2,650 SGD per month. A five room flat will require 2,860 SGD per month. All these rentals are median actual transaction prices in the third quarter of 2011.

Below table displays the latest median transaction prices for HDB flats in Bukit Merah as well as the last year same quarter and previous quarter prices. It is wise to check the asking prices against the median prices before going into a rental hunt.

Bukit Merah HDB For Rent Price Trends
Room	Q3 2011	Q2 2011	Q3 2010	Q-o-Q Change	Y-o-Y Change
3-RM	$2,000	$1,900	$1,800	$100	$200
4-RM	$2,650	$2,500	$2,300	$150	$350
5-RM	$2,860	$2,800	$2,630	$60	$230

Bukit Merah HDB Rental Price Trends