The construction industry in 2023 fared better than the previous year, with twice as many new homes being built as pandemic-related bottlenecks eased. According to industry experts, however, it will take time for this increase in housing supply to impact the market. The rise in new homes is also expected to lead to a decrease in rental prices, providing relief to tenants in Singapore.
With more options available, tenants are likely to resist skyrocketing rents, especially in light of macro uncertainties and the rising cost of living. The good news for tenants is that high rents in Singapore are already beginning to ease. The government’s index for private housing leasing costs increased by just 0.8 percent in the third quarter, the slowest rise since the end of 2020, when rents began to climb.
This expected drop in rental prices will come as a relief to tenants, especially after experiencing a 30 percent surge in leasing costs last year. The number of vacant homes has also risen, outpacing the average of the past few years. However, while rents are expected to overall fall, some landlords may still raise prices on expiring leases from two or three years ago, but at a lower rate.
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