[B][SIZE=5]URA reviewing short-term rental of private homes[/SIZE][/B]

[B]Leases shorter than 6 months would benefit residential rental market and boost tourism but hit hospitality sector[/B]

By Chan Yi Wenyi

[email][email protected][/email]@ChanYiWenBT

22 Jan

THE Urban Redevelopment Authority (URA) is reviewing its policy on short-term rentals of private homes in Singapore - a move that observers say may help to give some reprieve to landlords who are bracing for an onslaught of new units coming into the market.

Under URA's guidelines, which were introduced in 2009 to safeguard the living environment of residents, private homes have to be rented out for no less than six months.

But over the past few years, URA has been receiving various views on its policy. While tourists and home owners are in favour of allowing shorter-term leases, other residents have raised concerns about noise, loss of privacy, security and misuse of common facilities.

Now, URA is seeking public feedback on whether it should relax this requirement. And as the authority reviews its guidelines, it will also be looking into enhancing its enforcement powers, particularly in the area of investigation capabilities, it said on Wednesday.

Minister for National Development Khaw Boon Wan has already voiced his disapproval of leasing private homes on a short-term basis.

"I myself think it is not a good idea," he wrote in a blog post on Wednesday. "While it earns extra income for the home owners, their neighbours would not like to see their quiet neighbourhood becoming a hotel district."

New York City has already banned Airbnb, an online short-term home- leasing platform, while Amsterdam and San Francisco are considering tighter regulations, he added.

Should the minimum lease period of private homes be shortened, it would be a boon to the residential leasing market, but at the expense of the hospitality sector. It's always a balancing act, said Donald Han, managing director of property consultancy Chesterton Singapore.

"We're looking at a supply imbalance right now," Mr Han said, citing a vacancy rate for private homes at about 8 per cent today, versus the 7.1 per cent recorded by URA for the third quarter of 2014.

This figure is set to surge further, following the completion of massive building developments that began three years ago, he said, forecasting vacancy rates for private homes to hit at least 10 per cent in the next 12-18 months.

This year, 20,824 residential homes in Singapore are expected to be completed - a jump of almost 3,000 from last year. In 2016, the figure is projected at 23,459, aggravating an already oversupplied market.

"By reducing the minimum lease period of six months, it does help to provide some breathing space for individual landlords to rent their premises," Mr Han said.

He gauges rental prices for private homes at a 20 per cent discount to serviced apartments, and about 40 per cent cheaper than hotels. With shorter-term leases for private homes, the hospitality sector will be affected, Mr Han said.

Property market research company R'ST Research director Ong Kah Seng acknowledged the merits of renting homes to foreigners on transient stays. Allowing for short-term stays will also help investors and home owners cope with increased difficulties in renting their homes for at least six months, he said.

However, the rise in vacant private homes is partially due to landlords who are unwilling to cut rentals, Mr Ong said. He also warned that such short-term leasing opportunities may raise private home prices - especially resale property prices - if buyers rely heavily on such added leasing opportunities to up their rental income expectations.

Turochas Fuad, CEO of travelmob, a short-term home rental platform and a potential beneficiary of shorter-term private home leases, says economic studies have shown that short- term rentals provide an uplift to the overall tourism industry of the country.

Since travelmob's incorporation, he has seen expatriates booking into Singapore who needed a few months' worth of accommodation before settling down with their families in their adopted homes, and medical travellers who required a longer-term stay and an accommodation with kitchen and washer/dryer facilities.

"The survey is definitely a great start to get to know the needs, concerns and opportunities better . . . (But) there should be considerations from the renters' side and the economic upside it brings to the tourism/accommodation industry," he said.

URA will be gathering public feedback through various avenues such as discussions with stakeholders and an online questionnaire which will last till Feb 23.