Build-to-rent homes could appeal to young Singaporeans, but can rent be kept under $2,000?

SINGAPORE – Young Singaporeans who want their own space but cannot afford several thousand dollars a month in rent could one day find a more affordable alternative in build-to-rent housing.

This could look like smaller, purpose-built apartments with basic facilities, developed by either private developers or public agencies.

The challenge is keeping rents low enough so young people can still save enough to buy their first property.

Currently, the most affordable rental options for those who cannot or do not want to buy their own homes are an HDB room for about $1,000 a month, or $2,000 to $3,000 a month for an entire flat.

But the Government is exploring build-to-rent options that could make renting more affordable.

“While home ownership remains a key tenet of Singapore’s social compact, there is demand for more flexible accommodation among younger Singaporeans who may want to rent for a period before buying their own homes,” National Development Minister Chee Hong Tat said in August.

This would allow them to experience independent living before buying a home, and add diversity to Singapore’s housing market, he added.

OCBC Bank’s head of wealth advisory Chez Anbu estimated that a sustainable monthly rent for young Singaporeans who plan to buy a home later in life would be $1,200 to $1,800 a month.

This is based on a commonly used benchmark of keeping housing costs within 25% to 30% of gross monthly income, he said.

He added that young people saving to buy a home should treat this benchmark as a “ceiling rather than a target”.

Rent should not prevent them from maintaining an emergency fund and continuing to save more than 20% of take-home income towards longer-term goals, such as buying a home or retirement, he said.

In 2025, the median monthly salary for full-time employed residents aged between 25 and 29 years was $4,680 for a male employee and $5,070 for a female employee, while that for those aged between 30 and 34 was $6,338 for a male worker and $6,335 for a female worker. For someone earning $5,000 a month, this translates to about $1,500 in rent.

Savills, however, put the potential market rent for a build-to-rent studio at $1,800 to $2,500, while a construction industry veteran said that private developers would struggle to charge less than $2,000 a month because of high land costs.

With much of Singapore’s public housing stock designed for families – three-, four- and five-room units make up the bulk of flats – singles wanting to live alone may find an entire unit too expensive, said Christine Sun, chief researcher and strategist at property firm Realion (OrangeTee & ETC) Group.

Condominium rentals are even higher, she added.

In the first half of 2026, median monthly rents ranged from $3,300 for a one-bedroom condo unit to $5,500 for a three-bedroom unit, according to data compiled by Realion Research.

What could build-to-rent look like?

Unlike Build-To-Order (BTO) flats, private build-to-rent models overseas comprise apartments designed and built for rental only.

Such developments are typically run by professional operators and no units are ever sold, said Emily Fell, senior director of living sectors, Asia-Pacific capital markets at Savills.

This model differs from co-living, which typically consists of studio rooms with shared kitchens and living spaces, taken on shorter stays.

The Ministry of National Development (MND) did not say if build-to-rent is likely to be handled by the public or private sector. Its spokesman said private long-stay serviced apartments, which were introduced in 2023, are one form of build-to-rent housing.

Since December 2023, two government land sales sites allowing for such developments have been awarded.

Another 21 applications to build such projects on private land have been approved, with more in the pipeline.

The ministry added that it has been monitoring developments in Singapore and overseas to better understand the role that build-to-rent models play in meeting different housing needs.

This includes learning from the market expertise of industry players, it added.

Fell said build-to-rent models could fill a gap for young people “who want their own front door, kitchen and some privacy” but find renting on the open market too expensive.

She envisaged build-to-rent in Singapore to include mainly studios and one-bedders of 350 sq ft to 550 sq ft, with some two-bedder units for friends or young couples.

Unison Construction’s contracts director, Goh Boo Kui, does not think a private developer could construct a build-to-rent project and rent out each unit for less than $2,000 a month under current cost conditions.

He said land cost is the main obstacle.

Unison has been the main contractor for several private residential projects, including Amber Park, 19 Nassim, Meyer House and Meyer Blue.

Today, a condo unit would cost around $400 per sq ft to build, with a small self-contained unit with a kitchen and toilet requiring around 400 sq ft, said Goh.

That is before other expenses such as financing and interest, marketing and property agent fees are taken into account.

Fell also identified land cost as a key obstacle.

Property developers recover their capital through unit sales within three to five years, she noted. In contrast, capital remains tied up in a build-to-rent development. Returns come from rental income – after deducting operating costs – over 10 years or more, she added.

To make build-to-rent more affordable, a different approach to land pricing may be required – for example, pricing government sites on rental value or shorter leases, said Fell.

Alternatively, HDB could build the homes and appoint a private operator to run them, Goh suggested. He estimated basic HDB construction costs to be between $220 psf and $230 psf, which could make rents below $2,000 more achievable.

“Build-to-rent is in the national interest. If the purpose is for transition, rent should be kept as low as possible, and it has to be built by the Government,” said Goh.

Fell also cited London’s East Village, the former Olympic athletes’ village that was converted into a large build-to-rent neighbourhood, as one possible model for Singapore.

“The state controlled the land, set the planning terms, and brought in long-term institutional owners to deliver rental housing at scale, including a share of discounted units,” said Fell.

“The shared lesson is that affordable build-to-rent doesn’t happen through the market alone. It happens when the government sets the terms for land and tenure.”

The price of independence

Even if build-to-rent can be delivered within the affordable range, a seemingly manageable monthly rent can add up substantially if a young person rents for several years, said experts.

Anbu calculated that $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,” said Anbu.

However, he also said that the decision should not be viewed purely in financial terms.

“Living independently can provide valuable benefits, including privacy, autonomy, greater personal responsibility and the opportunity to develop household and budgeting skills,” said Anbu.

“The challenge is to find a way to enjoy the benefits of independence without compromising basic financial resilience or materially derailing the longer-term goal of home ownership.”