3. Helping and retaining essential foreign workers
Allowing more people to share rental units can help reduce the cost of living. This will not only benefit these individuals but also help to attract and retain foreign workers who are essential in supporting sectors like manufacturing, nursing, service, and retail industries.
4. Better market stability
Increasing the occupancy per unit has the potential to mitigate demand pressures within the rental market. In turn, this could contribute towards a greater equilibrium between supply and demand and lower the rate of rental price growth.
5. Optimisation of living space
Furthermore, optimizing living space by accommodating more individuals within a single residence has the potential to enhance space utilization, particularly within larger units such as maisonettes, landed properties, and executive apartments that may be underutilized.
Other market impact
The new changes may lead to some challenges for the neighbours. More people will now be living within the same block, which may result in increased noise levels and more people sharing common facilities like lifts and condo amenities.
Small landlords owning smaller homes may face more competition as some tenants, singles, or students may lease a bigger unit with their friends or colleagues. The overall rental volume may drop slightly due to fewer units being leased, as bigger units can now accommodate more people.
However, on the upside, the resale prices of bigger condos and HDB flats may climb higher, especially older units. This is because such units can now accommodate more tenants and the higher demand may lead to better rents and higher yield, making them a more attractive option for rental income in the future.