On Feb 1, HDB announced that it will revise the occupancy cap for public housing rental flats of four rooms and larger, from a maximum occupancy of nine persons to six persons – including owners, occupiers and tenants – with effect from May 1.

According to Nicholas Mak, ZACD Group executive director, this affects a “small fraction” of the existing total number of flats that are permitted to be rented out. Flats approved for rent before May 1 will have to adhere to the cap only when there are changes in the occupants, or upon renewal of rental arrangements.

“This levels the playing field between the private residential and HDB leasing market, in terms of the number of tenants for respective unit types,” notes Mak. He reckons that HDB rental rates, however, will not be greatly affected as rates are typically determined by the location, age and size of the flat, rather than the number of tenants.

As some occupants in larger flats now housing nine or more tenants or occupants would have to find alternative housing, this could lead to a slight increase in the number of flats rented out in 2Q2018, as well as a slight growth in demand for workers’ dormitories as alternative accommodation for blue-collar workers, says Mak.

For flats with three rooms, the cap remains unchanged at six persons. Flats with one- and two-bedrooms can continue to be rented out to a maximum of four persons.

Separately, HDB has revised the cap on the number of persons allowed for living quarters in HDB commercial properties that are rented out. Such living quarters with three rooms or larger will also have a cap of six occupants come May 1, from a previous cap of eight occupants.

Based on the revised regulations, owners of such commercial quarters – no matter the size of the living quarters – will also be required to seek HDB’s approval before tenancy commences, when they were not previously required to do so.