According to the Monetary Authority of Singapore, rental pressures in the Singaporean private and public housing markets should be easing this year. This follows two years of “exceptional demand-supply imbalance” that was caused by Covid-19 disruptions and subsequent surge in rents.

Since 2021, HDB and private residential rents have experienced an increase of 38% and 43% respectively. Price change was widespread regardless of market segments or housing type – with prices of landed and non-landed properties in the private sector rising by 28.1% and 29.8% respectively. For public housing, five-room and three-room HDB flats saw hikes of 29.5% and 24.6% respectively.

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These rapid rises can be attributed to the impact the pandemic had on the construction sector, causing severe delays to completion of projects and creating “extremely tight” supply conditions. This, combined with strong demand for rental units resulting from Singapore citizens and Permanent Residents (PRs) seeking temporary accommodation, led to the current situation.

MAS also notes that robust employment and wage conditions last year may have also contributed to the market rent increases.

A boost in supply is expected to help alleviate the pressure moving forward, with close to 40,000 private and public residential units set to be completed this year, and roughly 100,000 units estimated to be available between 2023 and 2025. This, along with potential decrease in rental demand from Singapore citizens and PRs, as well as global economic uncertainties, should see the market rebalancing over the coming quarters. MAS believes that rental market imbalances have already started to ease and will continue to do so.