Singapore property rental market may face headwind and disruptions in 2026

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Singapore’s residential leasing market may be entering a new phase as fresh challenges and promising opportunities redefine the rental landscape in 2026.

Landlords must brace themselves for the upcoming market changes. Specifically, there will be a significant surge in housing supply, new macroeconomic challenges, evolving tenant profiles, and shifts in hiring policies. These factors will influence leasing demand and rental price trends in the years ahead.

However, there may be nuances in their effects across market segments, leading to divergence in market performance.

Supply surge to tilt bargaining power

Housing supply will play a more major role in influencing residential rental price growth over the next few years.

This year, the tide may turn in favour of tenants as the public housing supply is expected to climb. The number of resale flats reaching their five-year Minimum Occupation Period (MOP) is projected to rise from 6,973 units in 2025 to 13,484 in 2026, then to 18,939 in 2027, and to 21,393 in 2028, based on HDB property information from data.gov.sg.

This amounts to 53,816 MOP flats from 2026 to 2028, a 56.1 per cent increase from 34,474 units during the three-year period of 2023 to 2025.

As more than 50,000 flats reach their MOP over the next three years, we expect more flats to be listed for rent, intensifying competition among landlords. Since tenants will have a wider range of housing options, they will have greater negotiating leverage and stronger bargaining power to secure better rental rates and leasing terms.

The impact of the HDB supply surge may spill over to the private rental market as young expatriates seeking convenience and accessibility may switch to flat rentals. Some may find the benefits of residing in a new flat, with proximity to schools, MRT stations, shopping malls, or other amenities, outweigh the advantages of living in a private condo.  

Macroeconomic uncertainties may cool the market

The recent conflicts in the Middle East have heightened geopolitical risks. Alongside uncertainties surrounding global tariff negotiations, interest rate fluctuations, and dimmer global hiring prospects, investor sentiment and capital deployment may become more cautious.

The scale of impact from tensions in the Middle East is contingent on how the war unfolds. Should the war escalate and become prolonged, the increased volatility, coupled with higher oil prices and construction costs, could drive up business costs. Inflationary pressures could elevate interest rates.

The private rental market may face more impact as its tenants tend to be higher-paid expats who may have greater exposure to macroeconomic challenges. Existing trade barriers, ongoing trade tensions, high business expenses, and advances in Artificial Intelligence (AI) have already compelled many companies to reassess their global operations and strategies.

Rising business costs have further restricted companies’ expansion plans, resulting in fewer job openings and reduced expat hirings in certain sectors over the past year. Some MNCs have begun reducing their cross-border employment and international job placements, leading to the termination of some expatriate employment contracts.  

However, a steep correction in rental prices is not expected, as private home supply remains tepid. Unlike the public housing market, the number of private homes completed or with Temporary Occupation Permit (TOP) is forecast to hold steady at 6,083 units this year, comparable to the 6,123 units completed in 2025, according to Urban Redevelopment Authority (URA) data.

Nonetheless, landlords may need to adjust their rent expectations should macroeconomic conditions deteriorate. High asking rents could lead to longer vacancies in a cooling market. Older, less accessible and less favourably positioned properties might be vulnerable. Moreover, as companies restructure their workforce, some tenants might seek flexible or shorter leases. Landlords should be prepared for open negotiations if they wish to attract a broader segment of tenants.

Embracing new tenant profiles

Certain industries in Singapore are expanding, such as healthcare, education, construction, and skilled trades. Landlords who are prepared to embrace new tenant profiles may continue to thrive.

AI will be one of the fastest-growing sectors over the next decade. Expatriate and foreign workers trained in AI will be in demand, including engineers, data analysts, system designers, and governance experts. Conversely, some manufacturing, retail, finance, creative design, and content production sectors have experienced job displacement worldwide.

Moving forward, automation and robotics will continue to replace some assembly lines and routine clerical and back-office jobs. The situation may be exacerbated by recent policy changes, where the minimum qualifying salary for Employment Pass (EP) and Special Pass (SP) holders will rise from January 2027.

Some employers may be more conservative about hiring foreigners after the policy change, reducing the overall pool of prospective tenants.  Landlords catering to these tenants must be aware of the potential hurdles ahead, especially for smaller or older resale flats that house lower-wage foreign workers in manufacturing and services, or suburban and city-fringe homes catering to middle-waged white-collar expats working in smaller tech firms.

To mitigate premature rental terminations and potential income loss, condominium landlords may consider pivoting their focus towards attracting high-resilience tenant profiles that are mid-to-senior specialists in AI, fintech, biomedical, or regional functions. Budding investors may consider properties in new growth sectors near major healthcare hubs, skilled-trade clusters, or prop tech regions that cater to new tenant profiles.

For example, the government is developing Kampong AI, a dedicated AI park at One North that houses AI practitioners, researchers, and start-ups under one roof. The hub, slated for completion by 2028, is part of a broader push to solidify Singapore’s position as a premier global AI hub. Another launchpad for AI start-ups is planned for Punggol Digital District. The Central Business District (CBD) and Marina Bay Area will also see more companies focusing on AI development and maintenance.

Landlords may also consider modifying their properties to offer more flexible workspaces or dedicated home offices for remote or hybrid work, which appeals to these new expatriates. They could also install or renovate their homes to include enhanced smart home features that better meet the expectations of tech-savvy renters and justify higher asking rents.

Market Projections

Macroeconomic uncertainties and potential rate hikes may exert pressure on the private rental market. Despite these challenges, the market will see an inflow of expatriates from emerging sectors such as AI. In light of the countervailing factors, overall private rents are projected to grow modestly by 2 to 3 per cent in 2026. Demand may slow compared to last year, with approximately 82,000 to 87,000 leases.

The HDB rental market will face stiff competition from increased housing supply and potentially lower demand due to changes in the qualifying salaries of foreign workers. However, the silver lining is its affordability, as tenants looking for budget-friendly rental options will still turn to the public housing market. Consequently, HDB rents could rise slightly by 1 to 3 per cent with fewer transactions, around 36,000 to 39,000 leases.