Legislation on Maximum Rental Fee Adjustments by Landlords Following Lease Renewal

Assoc Prof Jamus Jerome Lim asked the Minister for National Development whether there has been any consideration by the Ministry to legislate on the maximum rental fee adjustments by landlords following a lease renewal, to a maximum percentage of the prior rent as practised by other jurisdictions, such as Australia, Canada, China, France, Germany and many states in the United States.

Assoc Prof Jamus Jerome Lim asked the Minister for National Development (a) whether there has been any consideration by HDB to cap rental fee adjustments following a lease renewal to a maximum percentage amount of the prior rent; and (b) whether there are any practical constraints to imposing such a cap on rental increases.

My response will also address Parliamentary Question No 71, which was also filed by the Member.

Rental rates are showing early signs of stabilising. In the first quarter of 2023, the increase in public housing and non-landed private housing rents moderated to 4.4% and 6.2% respectively, compared to 8.1% and 7.5% in the previous quarter.

In the coming quarters, we expect rental pressures to further ease, as we ramp up public and private housing supply and a significant number of residential units are completed. Close to 100,000 public and private residential units are expected to be completed from 2023 to 2025. This will add to rental supply. It will also reduce rental demand, as households temporarily renting move out of their rental units and into their new homes.

To support Singaporeans who need to rent, Housing and Development Board (HDB) offers schemes, such as the Public Rental Scheme for low-income Singaporeans with no other housing options, and the Parenthood Provisional Housing Scheme, for eligible families who need interim housing while waiting for the completion of their Build-To-Order flat.

The rental rates for open market HDB rental flats and private residential properties are private arrangements between flat owners and tenants. International experience has shown that while rent controls may moderate rental increases for some tenants in the short run, they are likely to distort the housing market. Rent controls may inadvertently reduce rental supply and cause rental housing demand to exceed supply, which could lead to issues of allocation and equity. This may also distort property prices and disincentivise landlords from maintaining proper upkeep of their rental units. Nevertheless, we are not closed to any option and will continue to monitor the situation closely and adopt such measures as may be necessary.