Why Singapore is exploring Build-To-Rent housing models

SINGAPORE – Singaporean couple Henry Tay and Sarah Tong wanted to live on their own immediately after they got married in May 2024.

With their Build-To-Order (BTO) flat in Tanah Merah about three years from completion, they turned to renting their love nest even though it would cost them about 25% of their combined take-home pay.

Home was in two places in the last two years: first, a one-bedroom unit in a Bright Hill condominium, then a three-room flat in Ang Mo Kio. Rent was between $2,200 and $2,500 monthly.

In land-scarce Singapore, renting is often seen as an expensive option that yields no future returns, compared with ownership of a property which increases in value over time.

Yet it made sense to Tay, 36, a freelance photographer, and Tong, 32, a civil servant – having personal space and living close to their workplaces were their top priorities.

“We thought it’s better to start afresh,” said Tong.

In Singapore, a good number of married couples live with one spouse’s family or continue living separately until they get the keys to their BTO flat several years later.

To get their own space sooner, some opt to buy resale HDB flats, which usually cost more than BTO ones, or condo units, if they can afford it.

Tong and Tay’s decision to rent is unusual, but perhaps increasingly less so.

As housing needs and preferences change, the Government has been exploring build-to-rent (BTR) models as part of its efforts to offer more housing options.

“While home ownership remains a key tenet of our housing policy, we recognise that there is demand for flexible, longer-stay rental housing, including from younger Singaporeans who wish to live independently or rent before buying their own home, as well as those who come to Singapore to work or study,” said a Ministry of National Development spokesman.

National Development Minister Chee Hong Tat said in August that the authorities were looking to meet younger Singaporeans’ demand for flexible accommodation such as the BTR model, co-living and long-stay serviced apartments.

BTR an interim option

Sociologist Tan Ern Ser, an adjunct principal research fellow at the Institute of Policy Studies, said that while most Singaporeans are more inclined towards home ownership, having a BTR option could serve as an interim pathway for those who want to have their own private space and to live independently.

“But affordability remains an important consideration, especially (since) the option of living with their parents would certainly be less expensive,” he said.

Tay and Tong said renting came with financial pressures – it could go up to $100,000 over three years, on top of the cost of their $570,000 BTO flat, not to mention the cost of furnishing their rental unit, house-moving fees and utility bills.

But they said it would still be cheaper than buying a resale flat in a good location, which could cost as much as $1 million in some parts of Singapore.

They have cut down on travelling and are eating out less. And to reduce renovation costs for their upcoming BTO flat, they have decided to keep the design simple.

Eugene Lim, key executive officer of property agency ERA Singapore, said if the BTR model aims to support younger Singaporeans, it needs a clear value proposition compared with traditional rental options.

“To make BTR more accessible for young Singaporeans, offering a discount on the median monthly condominium rent could be effective,” he said, adding that the BTR model could be a public-private partnership similar to the long-stay serviced apartments piloted by the Government in 2023.

In the first eight months of 2026, the median monthly rent for non-landed residential properties in Singapore was $5.24 per sq ft. Homes in the core central region had the highest median rent at $5.92 psf, while that for the city fringe stood at $5.57 psf and $4.58 psf in the suburbs.

To bolster his point, Lim pointed to the high demand for a recent co-living pilot under the SG Youth Plan. Over 600 Singaporeans aged 21 to 35 showed interest in the more than 100 units, which were priced at about 30% below market rates.

Not only is rental cost high, it can also be unpredicable. Lim noted that rents can be affected by policy measures, such as the 15-month wait-out period for private home owners who wanted to buy a resale flat that was in effect between September 2022 and July 2026. Thereafter, in 2023 and 2024, residential rents increased sharply.

Observers The Straits Times spoke to agreed that implementing a BTR model would not make renting seem more attractive than home ownership, which the Government has pursued as “a key national policy” to give “every Singaporean a stake in the country”, as then Prime Minister Lee Hsien Loong said in 2018.

Sociologist Chua Beng Huat, emeritus professor at the NUS Department of Sociology and Anthropology, said renting tends to be transitory, and renters would likely try to move up the housing ladder and buy a flat when their financial circumstances allow.

Many singles are living with their parents because they cannot afford to move out, and there is pressure by many who want to live independently, hence the introduction of the subsidised co-living pilot, he noted.

“The Government’s sentiments have changed in the past few years, given the increasing pressure of singles wanting to live independently from their families.”

Independent living before marriage

Buying a home was always the goal for Asher Chua, 31, who rented a flat with two friends from 2021 to 2023, before he got married and bought a resale flat with his wife.

He said the sentiment that renting was “throwing away money” that could have gone towards his home purchase put a damper on his decision to rent at first.

But living in his parents’ five-room flat in Jurong West meant Chua, who has three siblings, did not have a bedroom of his own and often needed to study or work in the living room.

So when he managed to save six months’ worth of his monthly income, he looked for a place to rent. He eventually settled on a four-room flat in Pinnacle @ Duxton, paying $1,150 a month for a room without an attached bathroom. The total rent for the unit was $4,000, which he shared with two friends.

“That’s $24,000 I know I won’t get back, but it’s money well spent because I got to experience living independently before marriage,” said Chua, who works in technology.

His rented flat in a central location also meant that he could experience the perks of “city living”, such as being able to cycle to his workplace in the Central Business District, and having many amenities, such as gyms, close by.

“I’m a firm believer that when it comes to money, you can always earn it back. But experiences are something you cannot get back,” he added.

OCBC Bank’s head of wealth advisory Chez Anbu noted that rent adds up. For instance, $1,500 in monthly rent amounts to $54,000 over three years and $90,000 over five years.

“Compared with living at home and contributing $500 a month to family expenses, renting at $1,500 a month could leave a young person with about $60,000 less in savings after five years,” he said.

But he also said living independently can provide valuable benefits, such as privacy, autonomy and the opportunity to develop household and budgeting skills.

Chua said the money spent on renting did not affect the budget for his home purchase. He and his wife agreed that they did not want to fork out any cash for the down payment and monthly mortgage for their purchase – it should be fully covered by their CPF savings.

Their plan worked out. They bought their resale four-room flat in Clementi for $790,000 in 2023. They were also eligible for an $80,000 CPF Housing Grant and a $20,000 Proximity Housing Grant.

Sing Tien Foo, provost’s chair professor of real estate at NUS Business School, said the BTR model will supplement home ownership by meeting the short-term and temporary housing needs of families waiting for their flats to be completed, or those who cannot yet buy flats, such as singles under 35 years old.

“The dominant housing option is still ownership, where families consider buying houses not just to meet consumption needs but also to build housing wealth and provide retirement safety nets.”

Adeline Lim, 37, is currently renting a room in a two-bedroom condo in Sengkang while applying for a BTO flat as a single.

The marketing executive said she moved out of her parents’ home when she was 35 as she wanted to be independent.

“My parents were kind of overbearing,” she said. “I couldn’t truly be independent if I was still living under their roof.”

Her monthly rental of $2,000 is worth the independence, even though it means she has to live with a housemate, she added.

Lim said that despite the rental taking up a substantial portion of her take-home pay, she still has a “comfortable” amount for daily expenses, investments and savings.

Singapore Management University sociology professor Paulin Straughan said social norms have shifted – singles want to experience living independently rather than live with their parents until they get married.

This group would welcome the BTR model, especially if their current living arrangement is tight or if they have tense family relations, she said.

“When you give them a bit more space, and therefore there’s no contest for limited resources in a small home, it may actually ease the family tensions,” she added.

IPS’ Tan added: “If the BTR model is intended to be not just a place to live in, but also a growing community of young people, I reckon it may increase the probability of one meeting one’s life partner. In short, it could be a catalyst for marriage and family formation.”