The number of people renting out their entire HDB flat has significantly increased, with subletting approvals jumping to an all-time high of 36,228 in 2014 from 30,074 in 2013, showed HDB data.
In fact, 10,365 approvals were granted in the last quarter alone.
As at end-2014, there were 48,120 fully sublet units, up 5.4 percent from 2013’s 45,674 units.
An HDB spokesperson attribute the rise in subletting approvals to the desire of flat owners to monetise their flats as well as the availability of alternative accommodation.
Property agents and analysts note most flat owners who upgrade to private homes are unwilling to dispose off their HDB units.
“They are keen to keep a second property for investment,” said Christine Li, Research Director at OrangeTee. “They know that once they let go, they cannot buy back another one.”
Since 2010, private home owners are not allowed to purchase an HDB flat unless they sell their existing private properties.
“This makes sense from an investment angle,” noted ERA Realty’s Key Executive Officer Eugene Lim, since the rate of returns for leasing the flats is “very attractive” than that of condominiums, due to their lower acquisition price.
R’ST Research Director Ong Kah Seng also attributed the rise in subletting approvals to the weakening property market.
“The resale market now is very cold and makes it hard to fetch a good price…It makes more sense for people to hold on to their HDB flats and rent it out instead. They hope to have the best of both worlds,” he said.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
