Analysts demand 2028 occupancy cap extension to stabilise rents

Industry leaders warn that current housing relief must continue until the 2028 supply peak arrives.

Property analysts said extending the temporary relaxation of the occupancy cap for larger HDB flats and private homes would help ease rental pressures and stabilise the market, as tenant demand remains firm amid supply constraints.

Christine Sun, chief researcher & strategist of Realion (OrangeTee & ETC) Group, said allowing more occupants per unit would benefit both tenants and landlords by spreading rental costs across more people.

She said the move would help lower-income households, students, blue-collar foreign workers, some Singaporeans, and larger families, including those opting for multi-generational living.

Realion also highlighted HDB upgraders who rent temporarily after selling their flats to avoid additional buyer’s stamp duty as a group that could benefit.

Sun said higher allowable occupancy could help landlords improve rental returns at a time when rental growth has been modest over the past year, whilst maintenance costs, management fees, and property taxes have risen.

She added that higher occupancy could reduce living costs for essential foreign workers in sectors such as manufacturing, healthcare, services, and retail, supporting worker retention.

Realion said increasing the number of occupants per unit could also ease demand pressures and improve supply-demand balance, although it cautioned about potential downsides such as noise and heavier use of shared facilities.

Huttons also supported extending the relaxation, saying rental demand picked up in 2025. It is estimated that about 91,273 private homes were rented during the year, up 3.1% from 2024, while HDB flat rentals rose 6.5% to 39,054 units.

Against this, Huttons said supply remained tight, with an estimated 4,544 private homes completed in 2025 and about 8,000 HDB flats reaching their minimum occupation period, both lower than in 2024.

Huttons noted that private rents rose about 3% and HDB rents about 2% in 2025. It said extending the occupancy cap relaxation until 31 December 2028 would help relieve tenants and support rental market stability, as housing supply is expected to increase in 2026 and 2027 before peaking in 2028.

The firm added that supply could ease after 2028, suggesting the policy may need to be reviewed again depending on rental demand conditions.