Since Jan 1, non-Malaysian work permit holders from the manufacturing sector have no longer been eligible to rent a whole Housing Board flat, and can only rent rooms.
Those currently renting can stay on until their existing subletting approvals expire.
The rule change, reported by Chinese daily Lianhe Zaobao yesterday, affects about 3.5 per cent of HDB households that are subletting all or part of their flats.
It is unclear how many households this represents. As of Sept 30, there were 52,394 wholly sublet HDB flats. The HDB does not release figures on the number of flats that are partially sublet.
On June 1, 2016, the HDB sent a letter to flat owners who currently sublet their flats to non-Malaysian manufacturing work permit holders "to inform them of the change, so that they would have time to make the necessary preparations".
In response to queries, the HDB said: "This revision in subletting conditions is part of the Government's longer-term plan to house non- Malaysian work permit holders in purpose-built dormitories and approved workers' quarters with facilities to better cater to their needs."
Work permits are for semi-skilled foreign workers in the construction, manufacturing, marine, process or service sectors.
Since Nov 7, 2006, non-Malaysian work permit holders from the construction sector have not been able to sublet HDB flats or rooms. This was extended to the marine and process sectors from May 1, 2015.
Now, only non-Malaysian work permit holders in the service sector can rent whole flats. Asked if the rules will be changed for them too, the HDB said only that it "reviews its rules regularly to maintain the balance between the needs of flat owners and sub-tenants".
The HDB said Malaysian work permit holders can still rent HDB flats and rooms "due to the close historical and cultural similarities between Malaysians and Singaporeans".
The rule change is unlikely to have much impact, said employers.
Some firms, such as timber product manufacturer LHT Holdings, house workers in dormitories.
Mr John Kong, managing director of M Metal and a council member of the Singapore Manufacturing Federation, said most firms that do not house workers in dormitories are not involved in their workers' housing choice.
OrangeTee property agent Aaron Hong said that, in his experience, work permit holders from the service sector are more common as tenants.