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New long-stay serviced apartments pique interest of young renters, but cost is key

SINGAPORE — Young would-be house renters are excited to learn that they will soon have the option of staying in a new breed of serviced apartments, but whether they will opt for these apartments will depend on the cost.

New long-stay serviced apartments pique interest of young renters, but cost is key
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  • The authorities are piloting new long-stay serviced apartments with a minimum stay duration of three months
  • The pilot will start with two sites on Upper Thomson Road and Zion Road, the Urban Redevelopment Authority said
  • Some younger adults said that the cost of these apartments will be a main consideration
  • Property experts said that longer-term serviced apartments may be more appealing to Singapore residents and foreigners in need of transitional housing

SINGAPORE — Young would-be house renters are excited to learn that they will soon have the option of staying in a new breed of serviced apartments, but whether they will opt for these apartments will depend on the cost.

Five people aged 24 to 28 told TODAY about their various motivations for renting: Wanting independence from their parents but being unable to afford their own flat, waiting for their Build-to-Order (BTO) flat to be completed or looking for short-term accommodation while their home is undergoing renovation.

They spoke to TODAY after Minister for National Development Desmond Lee’s announcement last Wednesday (Nov 29) that Singapore would pilot a new category of serviced apartments to meet demand for longer-term stays, where renters must stay a minimum of three months.

Existing serviced apartments can cater to those who wish to stay for longer durations, but the current seven-day minimum stay requirement means that potential tenants compete with tourists and business travellers.

The new serviced apartments are set to cater to renters “in some transition”, Mr Lee said, and they will be located near existing MRT stations.

In a press release on Monday, the Urban Redevelopment Authority announced that the pilot will start with two sites on Upper Thomson Road and Zion Road launched in early December, with a potential yield of around 535 serviced apartments in total.

“While homeownership aspirations among Singaporeans remain strong, there is a segment of the population that opts to rent. This includes some younger Singaporeans who may choose to rent as a start,” the agency said. 

Two sites on Upper Thomson Road (right) and Zion Road (left) are expected to have a potential yield of around 535 serviced apartments in total.

ALL COMES DOWN TO COST

The five people interviewed by TODAY have not rented a serviced apartment before, but most of them said that they would consider this option depending on how affordable the rent would be. 

There are no current indications of the cost of staying in these future serviced apartments. Mr Martin Layar, a 26-year-old management trainee at a shipping company, hopes that the prices will be “reasonable” since it is a pilot project. 

Even so, renting such an apartment is an option he would only consider in “exceptional circumstances”, such as in the short term while waiting for renovations to be completed.

For Ms Deena Anwar and her partner, they turned to the rental market to find a place to stay while waiting for the delayed completion of her Pasir Ris BTO flat in 2026. This was when her family home felt crowded during the Covid-19 lockdown.

However, after finding out that renting a serviced apartment such as Coliwoo in Singapore could cost up to almost S$2,400 a month and they could not take their pets with them there, the couple decided to rent in Kuala Lumpur, Malaysia. 

On whether the newly announced serviced apartments would be a better alternative, Ms Deena, 28, was clear: “It all comes down to rental price and restrictions around things like pets.”

Some of those interviewed said that they are open to paying a premium for the flexibility of a shorter lease, especially if the serviced apartments are in a choice location. 

The Zion Road plot is attractive to 24-year-old Gideon Tan, since that is only 20 minutes away from his current workplace via public transport.

“But I definitely need to see the price (of the apartments) first... because I just graduated and am working as an intern for experience, so my salary isn’t that much right now.”

Mr Tan is now considering renting a single room in a public flat.

For Mr Travis Chan, a 28-year-old product manager, the two announced plots of lands being right next to existing MRT stations is “perfect”.

However, the new serviced apartments may still not meet his needs, because he plans to rent his own independent space until he can buy his own flat at age 35.  

“Even though the allure of service apartments is that your lease can be for 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,” Mr Chan said.

Moving is a laborious task, Mr Chan added, so he is not interested in taking a shorter lease. 

“There’s just so much effort, time and energy needed to move. I would much rather find a place I really like and straight away sign a two-year lease.”

Similarly, 26-year old allied health professional Ong Hui En is keen to rent a place for two years after she gets married, while waiting for her BTO flat.

She said that the locations of the pilot sites are “not bad” since they are near MRT stations, particularly the Upper Thomson one that is central and situated near both her and her fiance’s workplaces.

However, they would have to consider the disadvantages of staying quite far from their parents, who are in the east.

The site along Zion Road to be used for the pilot long-stay serviced apartments.

WHAT EXPERTS SAY

Property analysts and agents told TODAY that the new category of long-term serviced apartments may be more appealing to people in need of transitional housing. 

Ms Khairiah Samson, a real estate salesperson at ERA property agency, said that it is not uncommon to see people who have sold their flats seek out short-term leases. They are usually looking for a place to stay before moving to their next flat.

Property agents Timothy Chew and Silas Tan said that it may be difficult to find a place to rent for such cases, because many private landlords typically prefer a minimum tenancy of at least one year.

Other people who may find the new serviced apartments attractive include those waiting for house renovations to be completed, as well as exchange students and foreign working professionals for whom hotels might be too expensive.  

Despite the demand for flexible renting arrangements, the property experts said that tenants looking for a short-term residence may face difficulty because landlords dislike having to find new occupants every few months and prefer longer leases. 

Mr Luqman Hakim, chief data and analytics officer at property website 99.co, 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.

“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.”

No cost structure has been announced for the new housing type.

Some of the experts noted that current serviced apartments may be "too expensive" for renters.

Mr Luqman believes that the prices of the new serviced apartments are likely to be cheaper than existing ones, albeit with a longer tenancy.

On the potential long-term impact of introducing the new class of serviced apartments, the experts agreed that these measures may ease future demand in the rental market, although it is still too early to say.

With just two pilot locations announced for now, Mr Eugene Lim, key executive officer of ERA Singapore, said that the impact on the rental market will not be significant as yet. 

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee and Tie, said that some of the demand for short-term rentals may “shift towards the serviced apartment industry, which could ease some pressure on overall private rental prices”.

“However, this would largely depend on the rental prices of these apartments, which will affect the take-up of such apartments.”

Related topics

housing URA short-term rental

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