The extension of the temporary relaxation of the occupancy cap for rental of HDB flats and private residential properties until 31 December 2028 is expected to stabilise the rental market, according to Huttons Asia. This comes as rental demand surged in 2025, with 91,273 private homes and 39,054 HDB flats rented out, marking increases of 3.1% and 6.5% from 2024, respectively.
The rise in rental demand occurred despite a lower completion rate of homes. In 2025, only 4,544 private homes were completed, and approximately 8,000 HDB flats reached their minimum occupation period (MOP), both figures lower than the previous year. This shortfall contributed to a rise in rents, with private home rents increasing by an estimated 3% and HDB flat rents by 2%.
Looking ahead, the supply of private homes and HDB flats fulfilling their MOP is projected to increase in 2026 and 2027, peaking in 2028. However, post-2028, the supply is expected to decrease, potentially necessitating further policy extensions depending on rental market demand.
Huttons’ data, sourced from URA and HDB, underscores the importance of the occupancy cap extension in providing relief to tenants and maintaining market stability amidst fluctuating supply and demand dynamics.
