Rents to Fall? Budget 2026 Policies Reshape Singapore Rental Scene
Singapore’s property market is at a pivotal juncture, with the recently unveiled Budget 2026 introducing policies that are set to significantly influence the nation’s rental landscape. As a global financial hub, Singapore’s real estate dynamics are closely watched, and the latest governmental pronouncements signal a calculated effort to stabilize housing costs amidst evolving economic conditions. The biggest event from Budget 2026 with a direct and considerable impact on Singaporeans, particularly those in the rental market, is the adjustment of qualifying salaries for foreign work pass holders, coupled with a substantial increase in housing supply.
The government’s multifaceted approach, which blends adjustments to foreign workforce policies with a robust pipeline of new homes, suggests a future where rental price growth may moderate, offering some respite to tenants. This strategic recalibration aims to ensure that Singapore remains competitive for global talent while prioritizing the housing needs and affordability for its citizens and residents.
Key Budget 2026 Policies Affecting Rentals
A central pillar of Budget 2026 that directly impacts Singapore’s rental scene is the revised minimum qualifying salaries for Employment Pass (EP) and S Pass holders. From January 2027, the minimum qualifying salary for new EP applicants will increase to S$6,000 from S$5,600. For those in the financial sector, this threshold will rise even higher, from S$6,200 to S$6,600. Similarly, new S Pass applicants will face a higher minimum qualifying salary of S$3,600, up from S$3,300, and S$4,000 for the financial sector, effective from January 2027. These changes for renewal applications will take effect from 2028. Additionally, from July 1, 2026, the local qualifying salary for full-time local employees will be raised from S$1,600 to S$1,800.
Industry experts anticipate that these adjustments will influence the hiring patterns of foreign workers in Singapore. This, in turn, is expected to exert downward pressure on rental demand, particularly within the mass-market segments catering to S Pass and junior EP holders. Forecasts suggest a potential fall in rents for HDB flats and private housing by up to 3% in 2027 and 2028, should demand fail to keep pace with the increasing supply. While the full effects are expected to be gradual due to the phased implementation, the signal from Budget 2026 is clear: a recalibration of the foreign workforce profile is underway, with direct implications for the housing rental market.
Bolstering Housing Supply: A Crucial Counterbalance
Compounding the impact of workforce policy changes is the government’s sustained commitment to boosting housing supply across both public and private sectors. For public housing, the Housing and Development Board (HDB) plans to launch approximately 19,600 Build-to-Order (BTO) flats in 2026, spread across three sales exercises in February, June, and October. Notably, over 4,000 of these will be “shorter waiting time” units, with completion periods of less than three years. This forms part of HDB’s broader target to offer about 55,000 flats between 2025 and 2027.
Furthermore, a significant number of HDB flats are projected to reach their 5-year Minimum Occupation Period (MOP) in the coming years, thereby becoming eligible for resale or rental. This supply is expected to rise from around 7,000 flats in 2025 to approximately 13,500 in 2026, before surging to 18,939 in 2027 and 21,393 in 2028. This substantial influx into the secondary market will naturally expand the available rental pool.
The private residential sector is also poised for increased supply. Under the Government Land Sales (GLS) programme for the first half of 2026, land to build over 4,500 new private residential units will be released. This contributes to an overall pipeline of more than 58,000 private homes. The number of private residential units (excluding executive condominiums) projected to obtain Temporary Occupation Permit (TOP) is set to increase from 5,249 in 2025 to 7,006 in 2026, escalating further to 8,955 in 2027 and 10,195 in 2028. This consistent upward trend in housing completions, coupled with a moderation of demand in certain segments, is a key factor in the anticipated stabilization of rental prices.
Impact on Singaporean Tenants and Landlords
For Singaporean tenants, particularly those who have faced escalating rents in recent years, these developments offer a glimmer of hope. The increased supply of both HDB and private rental units, combined with potentially tempered demand from a more selective foreign workforce, could lead to more stable or even slightly declining rental costs in the medium term. This would alleviate some of the cost-of-living pressures many households have experienced. Median private rents, which stood at S$4,300 monthly in early 2026, could see their upward trajectory constrained.
Landlords, on the other hand, may need to adjust their expectations. After a period of robust rental growth, particularly in 2022 and 2023, the market is shifting towards a more tenant-favorable environment. While prime areas might still see modest rental growth of 1-4% in 2026, the overall market faces headwinds from increased competition. Landlords with properties in less desirable locations or those catering to the mass-market foreign worker segment may experience greater pressure to adjust their pricing strategies to secure tenants.
Wider Implications for Singapore Real Estate Investment
For investors eyeing the Singapore real estate market, these policy shifts and supply dynamics present a nuanced picture. While the overarching sentiment for private home prices remains positive, with forecasts suggesting a moderate rise of 3-4% in 2026 driven by lower borrowing costs and a leaner pipeline of *new* private launches compared to 2025, the rental segment requires careful consideration. The increase in supply, particularly of HDB flats reaching MOP and new private completions, suggests that rental yields may stabilize or even face marginal compression in the coming years, especially if demand moderates as projected. This will necessitate a more discerning approach to Singapore real estate investment, focusing on locations with resilient demand drivers and properties that offer strong long-term capital appreciation potential rather than relying solely on rapid rental income growth.
Existing property cooling measures, such as the Seller’s Stamp Duty (SSD) holding period of four years and the Additional Buyer’s Stamp Duty (ABSD) rates (up to 60% for foreigners and 17% for second properties for citizens), remain largely in place. While there have been calls from some market players to review certain aspects of the ABSD, particularly for ultra-luxury segments, Budget 2026 did not introduce explicit changes to these measures or HDB income ceilings, signaling the government’s intent to maintain market stability through calibrated growth and disciplined supply management.
Looking Ahead
Budget 2026 underscores the government’s commitment to fostering a sustainable and affordable housing market in Singapore. The combined effect of refined foreign workforce policies and a significant increase in housing supply is set to reshape the rental landscape, potentially leading to a moderation of rental price growth in the coming years. While the immediate impact on rents for 2026 may see continued stability with modest growth in some areas, the groundwork has been laid for a more tenant-friendly environment from 2027 onwards. This evolving scenario will require both tenants and landlords to adapt to new market realities, ensuring that Singapore’s property sector continues its trajectory of resilient and balanced development.
