Should the Build-To-Rent (BTR) model be implemented, it could benefit diverse groups such as the elderly who are empty-nesters and younger Singaporeans who crave their own space or have foreign partners.
With the homeownership rate in Singapore sitting at around 90%, analysts believe that providing an alternative housing option in the form of a build-to-rent (BTR) model may work– not just for the younger generations, but for different age profiles.
Under the BTR model, which has gained popularity overseas, a single, institutional landlord manages all units, reported Channel News Asia (CNA).
This is in contrast to the usual build-to-sell (BTS) model, in which units are sold to individual buyers.
Nominated MP Cheng Hsing Yao raised the prospect of a BTR model in March this year. It was raised again by MP Louis Chua (WP-Sengkang) in November while urging authorities to raise the stock of public rental housing across all flat sizes.
CNA noted that BTR projects differ from co-living apartments or service apartments since they are intended for longer-term stays.
In March, Cheng pointed that they are also professionally managed and often come with housekeeping, handymen service or community engagement programmes.
Analysts underscored that rental units would prove useful even in a nation with significantly high homeownership rates to cater to changing needs and aspirations.
“A lot of things have transformed and evolved over COVID, so much so that one keyword that has come up very often is flexibility. Rent offers a lot more flexibility versus purchase,” said Colliers Singapore Managing Director Tang Wei Leng as quoted by CNA.
Such units would also cater to the increasing desire of individuals for mobility, she said. Those looking to work overseas, for instance, may not want to buy a home, preferring instead to rent.
Alan Cheong, Executive Director of Research and Consultancy at Savills Singapore, said the need for a BTR concept has been “magnified, accentuated and accelerated” by the pandemic.
The work-from-home phenomenon has seen a spike in demand for rental units, driven by younger workers craving for more space of their own, said Cheong.
Related article: Single Millennial’s Guide to Renting in Singapore on A 2.5K Salary
He noted that lifestyles have also been changing, with more people preferring to remain single or postponing marriage. The rising number of those who have married foreigners, on the other hand, may want to acquire a home in their spouse’s country and rent one within the city-state.
Renting would also support an ageing population as empty nesters and seniors downsize their properties, said Tang.
“If you don’t like it, there’s (Sellers’ Stamp Duty) to consider and you got to suck it up and live in it for the next few years before you can move. However, if you rent, you can experiment. You can consider: Does it suit you?”
The prospect of having a single landlord also provides more security and comfort for older folks, she said.
Knight Frank Singapore Head of Consultancy Alice Tan said the BTR model could also “promote a spirit of entrepreneurship” among those wanting to invest in business instead of real estate.
She added that diverse accommodation choices would make living and doing business in the city-state more attractive.
In view of the current demand within the market, Tang believes the BTR model is “a very scalable proposition”.
“It offers different business possibilities, and it offers developers the potential of stable long-term income, asset management opportunities which could eventually be spun into a real estate investment trust (REIT),” she said.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
