Young renters are now eyeing new long-stay serviced apartments, but it “all comes down to cost”

SINGAPORE: Singapore is set to introduce long-stay serviced apartments, providing a housing option for individuals seeking accommodation for a minimum of three months. The Urban Redevelopment Authority (URA) disclosed that the initial phase of the pilot project will include two locations on Upper Thomson Road and Zion Road, with an anticipated launch in early December.

Minister for National Development Desmond Lee outlined the initiative last week, addressing the demand for extended stay options beyond the typical seven-day minimum requirement of existing serviced apartments. This move aims to cater to Singaporeans and foreigners in transitional phases, offering convenient locations near MRT stations.

TODAY reported that new long-stay serviced apartments garner interest among young renters. Five individuals aged 24 to 28 shared their perspectives on this housing alternative. Their motivations for seeking accommodation ranged from desiring independence to coping with the challenges of delayed Build-to-Order (BTO) flat completion and home renovations. However, the deciding factor for many revolves around the affordability of the new serviced apartments.

In a press release, the URA indicated that the pilot phase would yield approximately 535 serviced apartments across the two locations. While homeownership remains a strong aspiration in Singapore, the agency acknowledged a segment of the population, particularly younger adults, opting for rental arrangements.

The central consideration for prospective tenants, as voiced by those interviewed, is the cost associated with these new accommodations. Mr Martin Layar, a 26-year-old management trainee, expressed hope for reasonable prices, emphasising the temporary nature of his potential stay during home renovations.

For some, like Ms Deena Anwar and her partner, rental costs and restrictions, such as those related to pets, played a crucial role in deciding against serviced apartments. Ms Deena stated, “It all comes down to rental price and restrictions around things like pets.” Their search for alternative accommodation led them to Kuala Lumpur, Malaysia.

While shorter leases and prime locations attract certain renters, others, like 28-year-old product manager Travis Chan, prioritise stability and security, leaning towards longer-term rentals. He said, “Even though the allure of service apartments is that your lease can be as short as three months, I want to rent for the longer term. As somebody who’s residing here, having that stability and security of a place I can stay in for a good amount of time is important.” The proximity of the announced sites to MRT stations may appeal to some, but individual preferences and future homeownership plans influence their decisions.

Property analysts and agents anticipate that the new serviced apartments may cater to individuals needing transitional housing, such as those awaiting BTO flat completion, undergoing home renovations, or seeking short-term stays. However, challenges may arise as private landlords traditionally favour longer leases.

Chief data and analytics officer Mr Luqman Hakim of said, “While there is a diversity of needs, the rental duration contract is typically limited to a minimum of one year, even though the minimum by law is three months for private residences and six months for HDB flats.”

He added, “With the pilot, there is a chance that those groups that need something between three months to a year’s accommodation can attain them, especially if the rental cost is competitive to condominiums’ prices.”

While the URA’s pilot project addresses a diverse range of housing needs, industry experts caution that its impact on the overall rental market may not be immediately significant, given the limited scope of the initial phase. As per the vice president of research and analytics of OrangeTee and Tie, Ms Christine Sun, “This would largely depend on the rental prices of these apartments, which will affect the take-up of such apartments.”/TISG


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