Singapore raises rental occupancy cap to meet high demand
By Nurin Sofia
(Bloomberg) — Singapore will allow more tenants to occupy a single property under a temporary two-year measure to meet higher rental demand in the financial hub.
Starting next year, larger public and private residential properties will be allowed to house up to eight unrelated persons from the current cap of six, Minister for National Development Desmond Lee said in a Facebook post on Wednesday.
“This strengthens our view of a 5% to 10% drop in private housing rents in 2024,” Bloomberg Intelligence analyst Ken Foong said in a note. Serviced-residence operators such as CapitaLand Ascott may see lower income for their Singapore serviced residences, he added.
Rents in the city-state have surged since the pandemic, largely due to strong demand amid Covid-19 construction delays, Lee said. The government has committed to ramp up housing supply, with close to 100,000 homes expected to be completed by 2025.
The momentum in rental price rises has moderated and demand is expected to be restrained by high interest rates and moderation in wage growth, the country’s central bank said last month.
Still, Lee anticipates the need to maintain a healthy rental supply for buyers waiting to move into their new homes and foreigners who work and study in the city-state.
The new measures will only apply to four-bedroom apartments or larger, Lee said. Singapore will review the need to extend the temporary rules in end-2026.
©2023 Bloomberg L.P.
