According to the Monetary Authority of Singapore (MAS), rental pressures in the Singapore residential rental market should start to ease this year. This follows two years of exceptional demand-supply imbalance, caused by the Covid-19 pandemic. During 2021 and 2022, private and public housing rents jumped by 43% and 38%, respectively.

This jump in rents was observed across different market segments and housing types. Private housing landed and non-landed properties saw rent increases of 28.1% and 29.8% respectively in 2022. For public housing, five-room and three-room HDB flats experienced rises of 29.5% and 24.6% in the same year.

MAS attributes the rapid growth in rents to the “extremely tight” supply of residential units. This was caused by disruptions in the construction industry following the pandemic, and was exacerbated by safe management measures implemented which affected the pace at which construction activity could resume.

At the same time, the demand for rental units remained strong. In 2021, private rental demand from Singapore citizens and PRs increased to around 7,000 units, compared to the average annual increase of 1,300 units over 2018 and 2019.

With the easing of border restrictions in 2022, non-resident rental demand recovered quickly. In addition, robust employment conditions and wages may have also contributed to the strong pace of market rent increases.

However, MAS anticipates that a boost in new supply, together with a moderation in demand, will help alleviates rental market pressure. Close to 40,000 private and public residential units are expected to be completed this year and roughly 100,000 units over 2023 to 2025.

After a decade of providing leisure, JCUBE in Jurong East, Singapore, will close in August for a 40-storey residential and commercial development, JCube Condo Residence. JCube Residence CLD expects to launch for sale in 2023 and analysts anticipate a S$2,000 – S$2,100 psf price tag.

Rental demand from Singapore citizens and PRs could likely abate as the new supply comes on stream, and as they vacate their rental units to take up occupation of their completed owned units. Global economic uncertainties and slower growth may also further weigh on sentiments in the rental markets.

Therefore, MAS expects supply and demand imbalances in the rental market to be resolved. Market imbalances have already started to ease, and further residential rent increases are likely to ease in the coming quarters.