Two GLS sites to pilot as ‘long stay’ service apartments
The Urban Redevelopment Authority’s data showed that, in the third-quarter of 2023, rental growth had slowed from a previous increase of 2.8% to just 0.8%.
As a result, the number completed private homes reached a high of 9,013, marking the highest supply completion quarterly since Q2 2016. Cumulatively the number of finished units in the first 3 quarters of 2019 was 17,199. That’s three times what it was last year.
It is crucial to maintain “a healthy rental supply” to accommodate those who may need to rent. This includes those who wait to receive the keys of their new home as well as those working or studying in Singapore.
The new serviced apartments cater to those that are interested in longer-term stay, and will not have to compete for the same tenants as shorter-term ones. These include tourists, business travellers and other travelers.
Market watchers have concluded that taking these renters off the residential rental market could also help lower the asking rents from private landlords.
This will help fill a gap since the majority of landlords in both the private and public rental markets prefer a 2-year lease.
URA says that the number of private homes expected to be completed this year is around 20,400, which is the highest total for the entire year since 2017.
The government will be able to measure the market before deciding whether or not this category can become more widely available.
While most Singaporeans still desire to own their homes, others have expressed an interest in renting.
This could also alter the business model of developers that want to build, sell and develop. Either they will manage the apartments themselves or work in partnership with an operator. It is possible that the GLS sites will not affect the top bid.
Singapore has seen a rise in residential rents over the past two decades due to strong demand and a shortage of housing. Analysts note that the market is finally easing, with signs stabilisation of demand and lower price asking.
SRX, 99.co and other flash estimates show that the rents on private property were down by 0.2 % in October. Rents in the public housing sector, on the other hand, fell 0.4 percent for their first fall since 2021.
To meet rental demands, a class of serviced flats with a higher minimum-stay requirement (at least three months) will soon be available.
Two state land sites will be sold in early December as part of the Government Land Sales program’s list of confirmed private residential housing projects for the second half.
A portion of the floor area in Upper Thomson Road or Zion Road is set aside for serviced apartments with a potential yield of around 535 units.
The new long-stay serviced accommodation is not strata subdivided.