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Singapore housing tenants have been making do with rent hikes the past year or so.
Fortunately, the days of increasing rents appear to be ending soon.
The Monetary Authority of Singapore (MAS) said residential rent increases should ease in upcoming quarters as more homes are built and rental demand moderates, according to The Straits Times.
Why has rent been so crazy?
Since 2021, the residential market in Singapore has seen an "exceptional demand-supply imbalance" thanks to Covid-19, MAS said.
When border control tightened, the construction industry faced "extremely tight supply conditions", reported ST.
Coupled with international supply chain disruptions and shortages in foreign labour and construction materials, completion of both private and public housing projects were delayed.
From 2020 to 2022, only an estimated 20,000 private and public homes were completed annually.
To put that number into perspective, this was about 22 per cent lower than the average of 26,000 units built per year from 2018 to 2019, as revealed by MAS.
The situation was exacerbated by the surge in rental demand during the same period.
Rental demand from Singapore residents saw an increase of roughly 7,000 private rental units in 2021 — almost five times more than the average yearly increase in 2018 and 2019, as per ST.
This outweighed the fall in non-resident demand.
More houses to be completed as construction industry recovers
The future of the housing rental market appeared to be a landlords market.
But things are taking a turn for the better for tenants post-pandemic.
As border restrictions loosen and go back to normal, supply constraints faced by the construction industry will eventually ease up, allowing more homes to built.
Around 40,000 public and private homes will be completed in 2023 — a record number of yearly completions since 2018, according to ST.
The Housing and Development Board (HDB) is also set to finish 20,000 Build-To-Order (BTO) flats in 2023.
It only managed to complete 7,000 of such flats in 2020.
Such figures should hold over the next two years, ST reported, as a projected 100,000 private and public homes will be completed over the next three years.
In its biannual macroeconomic review, MAS noted that rent increases will be further moderated, as Singaporeans and PRs leave the rental market and move into new homes.
Top images via @wahlauryan/Unsplash