Open market rents have increased in the past three years due to "unprecedented supply-side constraints and increased rental demand" arising from Covid-19, said Second Minister for National Development Indranee Rajah.
Indranee was answering questions posed in Parliament on Apr. 2, 2024, on the open market rents for Housing & Development Board (HDB) three-room, four-room and five-room flats and the Parenthood Provisional Housing Scheme rental vouchers.
While the rents have increased from 2021 to 2022, the public and private housing rents have shown signs of stabilising in 2023, she said.
Efforts to ease rent increase
Indranee said that the average year-on-year increase in open market rents for three-room, four-room and five-room flats in 2021 was five per cent and 35 per cent in 2022.
She attributed the increase in 2022 to the easing of border restrictions and recovery of non-resident rental demand.
She said measures to support households who need to rent accommodations have been implemented since then.
These include increasing the supply of both private and public housing, temporarily relaxing the occupancy cap for larger HDB flats and private residential properties, and ramping up the supply of rental flats under the Parenthood Provisional Housing Scheme (PPHS).
Indranee noted that the public and private housing rents have shown signs of stabilising — the average year-on-year increase in open market rents was 10 per cent in 2023.
Parenthood Provisional Housing Scheme
Speaking more on PPHS, Indranee said that the scheme provides a temporary housing option for families with lower income to rent a flat while waiting for their HDB flats to be completed.
She said that HDB is working to double the supply of PPHS flats from about the current 2,000 units to about 4,000 units by 2025.
Indranee introduced the PPHS (Open Market) Voucher Scheme, which serves as a temporary measure to support eligible families who rent HDB flats or bedrooms in the open market.
The scheme will run for one year from July 2024, and families must be eligible for PPHS and have a rental tenancy registered with HDB to receive the S$300 voucher monthly, she said.
Those who qualify for a full year of support will receive up to S$3,600, she added.
"The PPHS Voucher parameters have been carefully calibrated to provide some relief for eligible families while mitigating the potential inflationary impact on the rental market," she said.
No plans to increase income ceiling
Indranee said that the S$7,000 income ceiling targets families with less income at their disposal to rent on the open market.
However, she said that there are currently no plans to raise the income ceiling or to offer a higher voucher quantum.
She said that households with incomes above S$7,000 but have additional expenses due to exceptional circumstances, such as high medical expenses, may approach HDB for help.
"HDB will consider their applications on a case-by-case basis," she said.
Greater support for those in need
Member of Parliament (MP) Louis Chua noted the increase in rent in the past years and asked whether the government would consider providing greater assistance to those who cannot afford rent.
Indranee reiterated that the S$7,000 income ceiling is a measure to help those who are "less able to afford".
"If we increase that cap, you would have more people coming in, which would drive the rents up," she said.
She also highlighted the increase in the number of PPHS flats as one measure to assist those in need.
"So by increasing the number of PPHS flats and putting that into the mix, the lower income can access that even if they're not using the PPHS voucher," she said.
"I would like to say that we will keep an eye on this. We will bear in mind those who are not able to afford to have such easy access."
Top photos from Canva