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COVID-19 will no doubt leave a trail of destruction on the real estate landscape in Singapore. Activities in the real estate market have been curtailed by stricter border control, tighter safe distancing measures and particularly the implementation of the ‘circuit breaker’. The home rental market is unlikely to go unscathed as it is a derived demand. How then, will Covid-19 impact the home rental market?

Singapore’s Circuit Breaker

Before the outbreak, Singapore’s rental market was robust with an increasing influx of foreign professionals. Based on the latest data released by the Ministry of Manpower (MOM), a total of 189,000 Employment Passes were approved in 2019 – 3,200 more than in 2018.

However, according to Peter Koh, HJ Real estate, COVID-19 presents a very sombre threat to Singapore. Prioritising the prevention of disease spread and safeguarding public health, the Singapore government initiated a pseudo-lockdown, also known as the ‘circuit breaker’, which started on April 7. This was implemented despite the potential economic damage and repercussions from a shuttered economy.


Photo by Ong Wee Jin

Decline in Singapore real estate rental volume during Covid

As the circuit breaker kicked in, the month-on-month percentage drop in rental volume was the highest since 2011. Flash data released by real estate portal SRX Property on May 13, estimated that the number of non-landed private homes leased decreased by 36.5 per cent, from 4,829 units in March to 3,068 units in April. April’s rental volume was also 40.6 per cent lower than a year ago and 32.3 per cent below the five-year average. 

SRX’s estimations also showed rental decline of 0.9 per cent for private condos and apartments in April. Year on year, despite rising 1.8 per cent in April, private rent is down 15.7 per cent from its peak in January 2013.


Tables by Straits Time, Data by SRX

According to Ms Christine Sun, head of research and consultancy at Orange Tee & Tie’s, the rental volume decrease could be due to a few reasons. Travel restrictions enforced by many countries, including Singapore, have significantly affected and decreased the number of foreign expats who can enter Singapore for work. This is especially so for workers from neighbouring countries, like Malaysia, who remained in their home countries due to the coronavirus outbreak. As a result, the rental volume dropped.

In contrast to the plummeting sales in the midst of the circuit breaker, private homes rental was improving, rising 1.1 per cent in the first quarter of 2020. This was a pick up from the 1 per cent decrease in the previous quarter. By locations, rentals of non-landed homes in the outside central region (OCR) performed the best at an increase of 1.9 per cent, followed by core central region (CCR) increasing by 1.4 per cent and rest of central region (RCR) increasing by 0.6 per cent.

Covid-19 and the future impact on Singapore’s real estate rental market

Looking ahead, observers believe that the rental market will continue to face challenges as companies adopt more conservative hiring policies and prospective tenants are restricted from visiting and inspecting properties for lease during the circuit breaker period.

It is highly likely that the pandemic will have an enduring impact on the home rental market, even as the economy stirs into activity. The employment market is expected to shrink, causing some foreigners to lose their jobs and resulting in weaker leasing demand. This could ultimately lead to a 2 to 4 per cent year-on-year decline in the private residential and HDB rental index for the rest of 2020. Prior to the outbreak, housing rentals was expected to increase 1.5 to 3 per cent this year due to the tight labour market and lower supply of completed private homes.


With Singapore’s rental market heavily relying on foreign professionals, the Covid-19 pandemic has dealt a blow to the home rental market. In April, implementation of the circuit breaker restrictions had resulted in a 36.5 per cent and a 0.9 per cent drop in private home rental volume and prices respectively. Despite repeated fiscal boosts to the economy and monetary payouts to Singapore citizens, the economy is widely expected to suffer as the country, and the world, engage in a prolonged battle with a highly contagious virus. This, in turn, is expected to have a depressive effect on the private home rental market in Singapore.

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This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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