From next year, HDB owners can rent their flats or bedrooms to non-Malaysian foreigners for a longer period of time.
Each new tenancy agreement would last a maximum of two years, six months longer than currently allowed. The revised tenancy period will apply to applications received from Jan 1.
In a statement yesterday, the Housing Board said that the revision will give flat owners "greater flexibility to secure a longer tenancy period with non-citizen tenants who may have work/immigration passes that are valid for a longer period of two years".
The minimum rental period for an HDB flat is still six months.
The maximum tenancy period for Singaporeans and Malaysians remains unchanged at three years. There is no maximum period for tenants in private residences.
Property analysts said the change was a practical one that was a long time coming.
ZACD Group executive director Nicholas Mak said the move would result in less hassle for landlords, tenants and the HDB, as renewals can be done less frequently.
ERA Realty key executive officer Eugene Lim said the change would provide more certainty to tenants, as the current limit of 11/2 years is too short for most foreigners, who have work passes for two years. It sometimes leaves them in limbo.
Number of flats - less than 4 per cent of the total public housing stock - that are rented out to foreigners.
Percentage drop in rents in November, from their peak in August 2013.
"Also, it is more straightforward for agents to compute commission," he said. "Two years' tenancy usually works out to a commission of about one month's rent."
However, both agreed that the move is unlikely to have an impact on a softening rental market, which saw rents last month come down 15.8 per cent from their peak in August 2013.
Currently, more than 43,000 flats - less than 4 per cent of the total public housing stock - are rented out to foreigners, an HDB spokesman said, adding that the figure does not include those who rent bedrooms.
Mr Mak said: "It is not a groundshaking move as landlords or tenants can always renew an agreement if they like each other.
"And this is not going to boost the soft rental market, mainly because of the restricted number of foreigners. Right now, it is a tenant's market - it is not in their interest to lock themselves in for longer periods."
The maximum rental period was last changed in March 2013, when it was halved from three to 1-1/2 years for non-Malaysian foreigners to prevent foreign enclaves.
In response to why the latest revision did not match the term for Malaysians, the HDB spokesman said that there were "close historical and cultural links between Malaysians and Singaporeans".
The move was met with lukewarm response from foreign renters.
Post-graduate student Kay Thi Swe Tun, 25, from Myanmar, has rented a bedroom in an HDB flat in Clementi for the past six months, and said the changes are unlikely to have a big impact on her.
"My landlord and I have agreed to give each other one month's notice if we need to terminate the tenancy. Given the current rental climate, I think there is no big difference whether the term limit is 1-1/2 or two years."