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The Surge in Rental Prices Continues: What it means for Tenants in 2023

Based on the Urban Redevelopment Authority (URA) rental index, we saw non-landed properties having a whopping 29.7 percent hike in 2022 alone, even higher than the 9.9 percent growth in 2021. This is a 15-year high that has impacted many existing tenants that are facing a surge in their cost of living in Singapore.

As detailed by The Business Times, the six drivers of the non-landed private residential rental market in 2022 were: active hiring by companies, tight supply of homes for rent, hybrid work, return of foreign students, rising interest rates and co-living operators.

And as declared by the Ministry of Manpower (MOM), the current non-resident employment rate is fast reaching back to pre-covid levels in 2019. This would mean that companies are actively hiring and filling up their positions of the 211,500 non-resident workers. Active hiring saw many more overseas applicants and foreign talent coming into Singapore for job opportunities, which resulted in a greater demand for houses in general.

In addition to the construction delays caused by the pandemic, many of the locals also had to resort to renting a place to tide over while waiting for their new homes to be completed. Coupled with the hybrid work environment that encourages individuals to rent a place of their own for a better work-from-home environment, the demand has been going very strong for rental units.

As it stands, we are seeing rental units being taken up with just one viewing, where potential tenants outbid one another to secure a unit, driving the prices up further.

The number of flats that are reaching their minimum occupation period (MOP) is also lower this year, which means that the supply will also see a slow down. With the market forces in place, the stronger demand and weaker supply will continue to keep the rental prices high.

The strong comeback in rental demand is likely to continue as the higher property taxes and interest rates will most likely contribute to further increases in rental rates.

Potential tenants will most likely face another year of price surge in rental prices, and it is best that they secure a viable unit as soon as possible. If you require more property updates and information, feel free to reach out to get the resources that you need to secure your place.


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