Rental Market Analysis: Strong Q3 Peak Season Effect, Pullback Likely in Q4

In July 2025, Singapore's rental market strengthened across the board, propelled by a seasonal surge. Overall private residential rents rose 1.5% month-on-month (MoM), while HDB rents climbed 1.6%. Market watchers expect rental activity to peak in the third quarter of this year before tapering off in the fourth quarter. The market was largely driven by expatriate relocations, families settling into homes ahead of the new school term, and mid-year lease expiries.

Data reveals a distinct divergence across the private home segments. Rents in the Outside Central Region (OCR) posted the highest MoM increase at 2.1%, followed by the Rest of Central Region (RCR) at 1.1%, while the Core Central Region (CCR) edged up 0.6%. On a year-on-year (YoY) basis, overall private residential rents grew 3.1%, led by the CCR with a 3.0% gain, while the OCR and RCR rose by 2.7% and 2.5%, respectively.

Leasing activity also rebounded sharply. In July, a total of 8,691 private residential rental transactions were recorded, surging 30.2% MoM and 6.6% YoY, and coming in 10.6% above the five-year average for the same period. The OCR accounted for 39.1% of deals, followed by the RCR at 33.1% and the CCR at 27.8%. Analysts pointed out that leasing demand was strongly supported by tenants returning to the market post-holidays, alongside an influx of international students, foreign educators, and multinational corporation (MNC) employees.

The HDB rental market similarly sustained its upward trajectory. Rents in mature estates increased 1.8% MoM, while non-mature estates rose 1.3%. By flat type, 4-room units registered the largest gain, up 1.9% MoM and 3.7% YoY. Five-room flat rents also rebounded 1.1% MoM following consecutive declines. Overall HDB rents were up 3.2% YoY, with mature and non-mature estates logging increases of 3.5% and 2.8%, respectively. HDB rental volume stood at 3,168 transactions in July, jumping 16.9% MoM and 4.6% YoY, and outpacing the five-year average for the month by 2.9%.

Market observers noted that the pickup in rental volume indicates HDB flats remain the go-to "affordable alternative" for tenants priced out of the private residential market. Moving forward, leasing demand is expected to remain resilient in the coming months, peaking in the third quarter before moderating in the fourth quarter. Given the relatively low supply of newly completed private homes this year, private residential rents may continue to record moderate gains even after the peak season ends.