Singaporeans bound to see some rental relief as housing supply rises

Over 18,000 new homes are slated for completion in 2023.

The influx of new home supply may ease rental pressures in Singapore. According to OrangeTee, rents have been rising continuously for over two years as demand outstrips supply. 

In 2023, there will be a significant ramp-up in housing supply, with more than 18,000 new private homes, excluding executive condominiums (EC), slated for completion.

Here’s more from OrangeTee:

The bulk of new home completions will be in the suburbs or Outside of Central Region (OCR), with around 9,139 units, followed by the city fringe or the Rest of Central Region (RCR), with approximately 6,617 units, and the prime areas or Core Central Region (CCR) with about 2,478 units. 

The increased housing supply may ease rental pressures, especially in the suburbs and city fringe areas. There could be some relief in sight for HDB upgraders and Singaporeans who are renting as they wait for the completion of their new homes. There will be more housing options, and possibly an increased number of suburban homes offering affordable rents. 

Rents may rise further next year, albeit at a slower pace. The increased supply and more intense competition for tenants may help to rein in runaway rental prices. These factors will not be sufficient to cause rents to fall significantly as landlords may not be willing to drop rents given the rising cost of living, higher property taxes and increased mortgage rates. Therefore, the net effect may see rents rising slower by around 13 to 16 per cent in 2023 after an estimated increase of about 26 to 29 per cent this year. 

Rental volume may moderate slightly as rents continue to rise and overall housing stock shrinks. Even with the increased supply, the total rental volume in 2023 may still be lower than in previous years. Tenants are signing longer leases of around two to three years. The rental market will eventually get tighter as the total rental stock continues to shrink in the long term.