HDB flats (also referred to as public housing) represent around 78% of the available residential housing supply in Singapore. Their relatively affordable pricing compared to private residential properties gives them an advantage as rental properties.
As an investment, the rental yield indicates the income potential of the leased property; the higher the yield, the better the investment. We compare the rental yields for the different HDB flat types across the towns/estates in Singapore to determine the best option for rental income in 2024.
Deriving Rental Yield Calculations:
Assumptions are made that the rental properties have completed their minimum occupation period (MOP) and the whole flat is leased for rent.
Data for the median price and median monthly rent is based on HDB 4Q2023 Resale Statistics and HDB 4Q2023 Rental Statistics, respectively.
The gross rental yield is calculated as annualised rent divided by the purchase price multiplied by 100.
We have excluded 2-room and executive HDB flat types due to insufficient transaction volume.
Rental Yields For 3-Room HDB Flats
HDB 3-Room
Towns
Median Price
Median Monthly Rent
Annualised Rent
Rental Yield (%)
Ang Mo Kio
$388,000
$2,800
$33,600
8.7
Bedok
$375,000
$2,700
$32,400
8.6
Bishan
*
$3,000
$36,000
*
Bukit Batok
$378,000
$2,930
$35,160
9.3
Bukit Merah
$411,500
$2,200
$26,400
6.4
Bukit Panjang
$405,000
$2,200
$26,400
6.5
Bukit Timah
*
*
*
*
Central
$481,500
$3,000
$36,000
7.5
Choa Chu Kang
*
*
*
*
Clementi
$394,000
$3,000
$36,000
9.1
Geylang
$345,000
$2,700
$32,400
9.4
Hougang
$398,900
$2,600
$31,200
7.8
Jurong East
$365,000
$2,580
$30,960
8.5
Jurong West
$365,000
$2,600
$31,200
8.5
Kallang/Whampoa
$384,500
$2,800
$33,600
8.7
Marine Parade
*
$2,800
$33,600
*
Pasir Ris
*
*
*
*
Punggol
$475,000
$3,000
$36,000
7.6
Queenstown
$401,000
$3,000
$36,000
9.0
Sembawang
$440,000
*
*
*
Sengkang
$470,000
$2,830
$33,960
7.2
Serangoon
$390,000
$2,700
$32,400
8.3
Tampines
$430,000
$2,800
$33,600
7.8
Toa Payoh
$370,000
$2,800
$33,600
9.1
Woodlands
$395,500
$2,580
$30,960
7.8
Yishun
$400,000
$2,600
$31,200
7.8
Bishan, Bukit Timah, Choa Chu Kang, Marine Parade, Pasir Ris and Sembawang were excluded due to insufficient resale transaction data.
Top 3 HDB Towns With The Highest Rental Yield:
Geylang – 9.4%
Bukit Batok – 9.3%
Clementi & Toa Payoh – 9.1%
Average Rental Yield For 3-Room HDB Flats Across All HDB Towns: 7.8%
Geylang takes pole position as the HDB estate with the highest rental yield for 3-room flats at 9.4%. This is around 1.6% higher compared to the average rental yield of 7.8%. The high rental yield in Geylang can be attributed to its below average home prices, which are around $55,000 cheaper than the average 3-room flats, which cost $400,000.
Conversely, 3-room flats in Bukit Merah have the lowest rental yield at 6.4%. Though the median flat prices are slightly above the average price, likely due to its central location, the rents commanded at $2,200 per month are not only the lowest but are also around $500 below the average rent of $2,700 per month. This may have led to lower rent yields for 3-room flats in Bukit Merah.
Read Also: HDB Price Guide: 5 Cheapest HDB Estates For 2024
Rental Yields For 4-Room HDB Flats
HDB 4-Room
Towns
Median Price
Median Monthly Rent
Annualised Rent
Rental Yield (%)
Ang Mo Kio
$594,000
$3,300
$39,600
6.7
Bedok
$530,000
$3,200
$38,400
7.2
Bishan
$707,000
$3,500
$42,000
5.9
Bukit Batok
$593,000
$3,800
$45,600
7.7
Bukit Merah
$856,000
$3,000
$36,000
4.2
Bukit Panjang
$503,000
$3,000
$36,000
7.2
Bukit Timah
*
*
*
*
Central
*
$4,000
$48,000
*
Choa Chu Kang
$508,000
$3,000
$36,000
7.1
Clementi
$561,000
$4,000
$48,000
8.6
Geylang
$615,000
$3,530
$42,360
6.9
Hougang
$560,000
$3,200
$38,400
6.9
Jurong East
$497,500
$3,150
$37,800
7.6
Jurong West
$490,000
$3,280
$39,360
8.0
Kallang/Whampoa
$830,000
$3,600
$43,200
5.2
Marine Parade
*
$3,500
$42,000
*
Pasir Ris
$555,000
$3,200
$38,400
6.9
Punggol
$605,000
$3,200
$38,400
6.3
Queenstown
$928,000
$4,050
$48,600
5.2
Sembawang
$551,000
$3,000
$36,000
6.5
Sengkang
$575,000
$3,200
$38,400
6.7
Serangoon
$600,000
$3,200
$38,400
6.4
Tampines
$579,000
$3,350
$40,200
6.9
Toa Payoh
$750,000
$3,500
$42,000
5.6
Woodlands
$515,000
$3,000
$36,000
7.0
Yishun
$520,000
$3,000
$36,000
6.9
Bukit Timah, Central, and Marine Parade were excluded due to insufficient resale transaction data.
Top 3 HDB Towns For 4-Room HDB Flats With The Highest Rental Yield:
Clementi – 8.6%
Jurong West – 8.0%
Bukit Batok – 7.7%
Average Rental Yield Across All HDB Towns: 6.7%
For 4-room HDB flats, Clementi has the highest rental yield at 8.6%, compared to the average rental yield of 6.7%. Despite its classification as a mature estate, the prices of 4-room flats in Clementi are around $50,000 lower than the average 4-room flat price of $610,000. Moreover, it commands $650 more than the average monthly rent of $3,350. These two favourable factors contribute to its above-average rental yield.
In contrast, Kallang/Whampoa and Queenstown share the bottom spot with the lowest rental of 5.2%. Flats in these two estates, which are considered mature locations, command a high premium of between $220,000 and $320,000 over the average 4-room flat price. These could have had an impact on the overall rental yield.
Read Also: Could We See An HDB Flat Sold For $2 Million Within This Decade?
Rental Yields For 5-Room HDB Flats
HDB 5-Room
Towns
Median Price
Median Monthly Rent
Annualised Rent
Rental Yield (%)
Ang Mo Kio
$788,000
$3,800
$45,600
5.8
Bedok
$695,000
$3,600
$43,200
6.2
Bishan
$918,000
$3,600
$43,200
4.7
Bukit Batok
$767,500
$4,000
$48,000
6.3
Bukit Merah
$959,000
$3,200
$38,400
4.0
Bukit Panjang
$620,000
$3,200
$38,400
6.2
Bukit Timah
*
*
*
*
Central
*
*
*
*
Choa Chu Kang
$603,000
$3,250
$39,000
6.5
Clementi
*
$4,200
$50,400
*
Geylang
*
$3,900
$46,800
*
Hougang
$655,000
$3,450
$41,400
6.3
Jurong East
$628,000
$3,600
$43,200
6.9
Jurong West
$588,000
$3,500
$42,000
7.1
Kallang/Whampoa
$880,400
$3,750
$45,000
5.1
Marine Parade
*
*
*
*
Pasir Ris
$663,000
$3,500
$42,000
6.3
Punggol
$670,000
$3,400
$40,800
6.1
Queenstown
*
$4,300
$51,600
*
Sembawang
$602,900
$3,200
$38,400
6.4
Sengkang
$610,000
$3,400
$40,800
6.7
Serangoon
*
$3,200
$38,400
*
Tampines
$685,000
$3,600
$43,200
6.3
Toa Payoh
$881,900
$3,800
$45,600
5.2
Woodlands
$598,500
$3,300
$39,600
6.6
Yishun
$660,000
$3,500
$42,000
6.4
Bukit Timah, Central, Clementi, Geylang, Marine Parade, Queenstown and Serangoon were excluded due to insufficient resale transaction data.
Top 3 HDB Towns For 5-Room HDB Flats With The Highest Rental Yield:
Jurong West – 7.1%
Jurong East – 6.9%
Sengkang – 6.7%
Average Rental Yield Across All HDB Towns: 6.1%
Jurong West claims the top spot as the HDB estate with the highest rental yield for 5-room flats at 7.1%. It is also the cheapest across all towns, with prices around $120,000 below the average 5-room flat price of $710,000. Given the lower prices and relative average rental income, flats in Jurong West are able to generate high rental yields.
Conversely, Bukit Merah takes the bottom spot with the lowest rental yield for 5-room flats at 4.0%, compared to the average 5-room rental yield of 6.1%. The 5-room flats in Bukit Merah are the most expensive across all towns, costing around $250,000 more than average 5-room flats. This cost translates to a lower rental yield for flats in the estate.
3-Room HDB Flats Offer The Best Rental Yield Opportunity
The relatively high HDB rental yields, led by the strong demand over the past two years for rental properties in Singapore, have incentivised more HDB homeowners to lease their flats. This can be observed with the total approved applications to rent out HDB flats increasing by 8.2%, or 39,138 cases in 2023, compared to 36,166 cases the previous year.
Based on our findings, 3-room HDB flats offer the best rental yield opportunity across the different HDB flat types. On average, these flats cost an average of around $400,000, or between $200,000 and $300,000 cheaper than the bigger flat types. They also generate an annual rental income of around $32,000, or about $7,000 to $10,000 less than the 4- and 5-room flat types.
However, rental yield should not be the only determining factor when considering an investment property. Capital appreciation is another means that investors can profit from their property investment. Typically, properties that may have high rental yields may have slower capital appreciation growth. Hence, investors should determine their investment objective before making a purchase.
Moreover, investors should also consider the restrictions when it comes to renting out an HDB flat (i.e., whole house can only be rent out after completing MOP and compliance with the non-citizen quota for renting out flat).
For those of us who need assistance in finding the best rates to finance our property purchase, having a good, trusted broker like our friends at Redbrick could not only give us a piece of mind but also allow us to enjoy unparalleled service.
The best part? The service is free since brokers like them receive their commissions from the banks. Whether you want the best loan rate or just someone to walk you through the process, feel free to get a non-obligatory quote and consultation.
Read Also: What Landlords Need To Know Before Renting Out Their HDB Flat or Bedroom In Singapore
The post Guide To HDB Rental Yields In Singapore [2024 Edition] appeared first on DollarsAndSense.sg.
