Singapore's rental market is booming after the easing of work visas.
According to 99.co and SRX, private apartment rents in Singapore rose nearly 31 percent as of September compared to the same period last year, while government apartment rents rose 24.7 percent, the 21st and 27th consecutive months of increases, respectively.
In September alone, private apartment rents rose 3.3 percent, while condominium rents climbed 3.2 percent, with private apartments in remote urban areas seeing the fastest increase of 3.9 percent.
While rents have been rising, demand remains strong and it is still essentially a seller's market.
With few options available, many tenants are agreeing to pay higher rents. Even older, less accessible houses are getting quite attractive rents.
HDB and private apartments are two different categories in the Singapore housing rental market.
The former is developed by the government and is inexpensive, but there is a waiting period and the nationality of the residents must be Singaporean.
The latter is developed by property developers and is expensive, usually without a waiting period and does not require the nationality of the resident.
While the real estate markets in Europe and the United States are heading towards a freeze, Singapore has attracted a large number of foreigners and wealthy immigrants due to its low tax rate and the relative safety and convenience of obtaining permanent residency, and the real estate market has been exceptionally prosperous.
In September this year, Singapore introduced new work visa regulations, opening up five-year work visas and long-term visas for specific fields.
At the same time, in an effort to curb the overheated real estate market, the Singapore government also tightened housing loan limits and raised the interest rate floors used to calculate the total debt service ratio and mortgage debt service ratio.
These real estate austerity measures aimed at home ownership may lead to more people renting, driving up rental prices.
Although it is estimated that more than 30,000 HDB units will reach their five-year minimum occupancy this year, these owners may choose to stay put before deciding on their next step, which could exacerbate the tight supply in the studio home rental market until demand peaks.
The rental market is likely to remain buoyant for at least six to nine months before housing supply growth brings relief.
About 17,000 private homes are expected to be completed next year, up from 14,000 this year.