In response to the surging demand for rental housing, Singapore authorities have announced a temporary adjustment to occupancy regulations, allowing up to eight unrelated individuals to reside in larger public flats and private homes. The move is set to take effect from January 22, 2024, to December 31, 2026. The Housing and Development Board (HDB) and the Urban Redevelopment Authority (URA) have jointly introduced this measure to address the tightening rental market, primarily influenced by the disruptions caused by the COVID-19 pandemic.

Key Changes and Scope:

The primary change involves raising the occupancy cap from six to eight unrelated individuals in residential properties, specifically targeting HDB flats with four rooms or more, living quarters of HDB commercial properties equivalent to or larger than a four-room flat, and private residential properties exceeding 90 sq m (969 sq ft) of floor area. Minister for National Development Desmond Lee emphasized that this adjustment would be limited to larger properties to maintain a conducive living environment for the community.

Private residential properties can be either condominiums or landed houses. 

Application Process and Fees:

Property owners currently housing up to six unrelated individuals must apply to either HDB or URA, depending on the property type, to include additional occupants. The application process includes an administrative fee ranging from S$10 to S$100, depending on the property type. The authorities will monitor the situation closely, and any infringements or serious disturbances may result in the revocation of rental approval.

The board has mentioned that requests to lease HDB flats or individual bedrooms can be conveniently submitted through HDB's online e-services. It is important to note that an administrative fee is required for each application, with a rate of S$10 per bedroom or S$20 per entire flat rented out.

Owners and tenants of HDB commercial properties seeking to lease their living spaces can initiate the application process through the GoBusiness Licensing Portal. It is emphasized that a per-application administrative fee of S$100 is applicable.

Potential Impact on Rental Market:

Experts suggest that the increased occupancy cap is not expected to have a significant impact on rents in the short term. Large private and HDB homes are already in short supply, and this measure provides tenants with additional options. While it may offer a short-term solution to stabilize the rental market, potential increases in demand for larger properties could lead to upward pressure on rents. Conversely, rents for smaller homes may face downward pressure as tenants seek larger accommodations.

Experts' Perspectives:

Mr. Andy Chia JT, Managing Director at Propertyforsale Pte Ltd, notes that the move addresses the current supply-demand gap in the rental market. On the other hand, he believes that allowing more people to share rental units can reduce the cost of living and attract essential foreign workers.

"The landlords of private condominiums with 4 or 5 bedrooms will welcome the relaxation of occupany cap and raise the rent accordingly," he said.

Mr Chia said that some older apartments and landed house owners could errect partitions to create additional bedrooms to accomodate more tenants.

Co-living operators will stand to benefit from this news on increasing the rental occupancy cap.

Rent Duration / Tenancy Period:

For private residential homes, the tenant must commit to a minimum stay duration of three consecutive months.

For HDB flats, the tenant must commit to a minimum stay duration of six consecutive months.

Future Considerations:

Minister Desmond Lee has mentioned that the temporary measure will be reviewed in late 2026, considering the rental situation. The authorities plan to enforce strict penalties for any infringements and will closely monitor the market. The government is also addressing the housing supply issue by increasing the number of completed public and private residential units in the coming years, providing relief to the tight rental market.

Conclusion:

Singapore's decision to temporarily ease occupancy restrictions in larger properties reflects a proactive approach to meet the rising demand for rental housing. As the city-state continues to grapple with the aftermath of the COVID-19 pandemic, these measures aim to strike a balance between supporting residents' housing needs and maintaining a harmonious living environment for the community. The success of this temporary adjustment will depend on how well it aligns with the evolving dynamics of the rental market and the broader economic landscape.