The Urban Redevelopment Authority (URA) is to seek public feedback on whether rules on short-term rentals of private homes should be changed.
The move follows a rise in popularity of websites such as Airbnb that let owners rent out their places for short stays - often at prices lower than at hotels.
In September, Senior Minister of State for National Development Lee Yi Shyan called on the Government to study the implications of this development.
The URA says current short- term stay guidelines are meant to "safeguard the amenity and living environment" of a residential development, and to ensure residents are not "adversely affected by the frequent turnover of transient occupiers".
However, it has told The Straits Times it will conduct a survey to gather feedback on the issue. "Given the current public interest (in) the matter, URA will be carrying out a public consultation to assess if there is a need to review the policy," it said.
It is currently illegal to lease a home for less than six months in Singapore. Private home offenders can be fined up to $200,000 and jailed for up to a year.
A search on Airbnb, Roomorama and travelmob turned up more than 2,000 local listings.
"We are thrilled that this conversation is happening," an Airbnb spokesman said.
"We believe Singapore should join other leading global cities like San Francisco, London, Paris and Amsterdam, which have all reformed outdated housing rules to allow for home sharing."
Roomorama co-founder Teo Jia En, 32, said a review of the rules could boost her business.
"The demand for short-term stays is strong. You have tourists and working professionals who are in Singapore for short stints," she said.
A 41-year-old business owner, who has been letting out a room in her Novena condominium unit via Airbnb since January, described the consultation as encouraging.
Most of her guests are tourists who stay for a few days. "Many of us host for financial reasons. I'll be relieved if what I'm doing is not considered illegal."
But such practices pose competition to hotels and serviced apartments, said Singapore Hotel Association executive director Margaret Heng.
"Critical to the tourism industry... is how we ensure safety, security and hygiene standards in private outfits," she said.
"If the (rules are revised), then it may be necessary to look at whether there is a need to license private premises that are rented out."
Since last year, the URA has received 575 complaints involving the alleged rental of individual strata-titled private residential properties for less than six months.
Most were about privacy and security, due to the presence of transient guests and their use of common facilities.