According to the Singapore Tourism Board, the country’s tourism industry made $13.1 billion in just the first half of 2019. During the same period, 9.3 million visitors came to Singapore as tourists. This means tourism is huge in the city-state. In fact, tourism accounted for around 5% of Singapore’s GDP in 2017.
With these astronomical numbers, it’s surprising to learn that short-term home sharing arrangements are not allowed.
The Law
On May 8, 2019, Singapore’s Urban Redevelopment Authority (URA) announced the ban on short-term home rentals. For a home sharing arrangement to be legally allowed, the stay has to last a minimum of three months. According to Business Insider, this decision was reached after consultations with the neighborhood committees, condominium management groups, hotels, serviced apartments, and the public. Of course, home-sharing operators called the decision ‘overly restrictive,’ but it persisted.
The URA cited the national survey they commissioned stating that the majority of the respondents had worries concerning security, privacy, damage to common facilities, and other effects the industry may have on other residents. Only seven percent of those surveyed said they were open to home-sharing.
Airbnb
In 2018, Airbnb enjoyed a significant increase in its revenue as many of Singapore’s tourists booked their stay with the company’s partners. Airbnb recorded a $411 million contribution to Singapore’s income in 2017. People also preferred the platform because 85 percent of its partner homes were located outside the busiest tourist spots. This meant it was the cheaper option. Plus, it would also give visitors access to the lesser-known attractions of the city.
After the law was enacted, many Airbnb property owners feared the $200,000 fine associated with it. There are no restrictions for tourists to stay for any duration on home sharing properties, but the owners may face the fine.
Serviced Apartments
Because of the law, serviced apartments have been on the rise for visitors intent on staying mid to long-term. Unlike home sharing properties, serviced apartments are built by known accommodation providers and licensed particularly for those durations. They’re also usually managed with strict standards in mind.
According to the URA, these serviced apartments can be allowed in residential zones, but they’re not allowed within landed housing areas or areas where they may cause dis-amenities to the nearby residents.
Visitors who still want the vibe of staying in residential areas may go for serviced apartments if they prefer to stay mid to long-term.
Landed Properties
Landed properties are among the most luxurious commodities in Singapore. They can cost anywhere between a few hundred thousand to hundreds of millions of dollars. According to Asia One, the average Singaporean cannot afford this kind of home. Landed properties are also known for their premium locations and elegant home interior design.
Although the property sales market has gone down recently, according to Channel News Asia, the rental market has risen.
Even though landed properties are also included in the list of homes the URA law covers, those who can afford to stay in one of the most expensive cities in the world can also afford to rent out land properties for over 90 days.
Rental in Singapore may have been changed by the law, but many still thrive under the circumstances. Their tourism continues to show promise and property owners are likely to continue getting business.