Singapore's residents are growing increasingly frustrated with the surge in short-term rentals. Government officials and hotel operators are also sharing in the frustration. Tourism in Singapore has actually surged this year. However, this isn't being reflected in hotel revenues and receipts. This likely means that tourists are choosing to rent private homes during their stays instead of following the traditional route of checking into hotels and resorts.
What makes Singapore a unique case is the fact that strict rules haven’t slowed down the supply or the demand for short-term properties. Tourists looking for rentals in Singapore are caught in the middle of the battle over short-term rentals. While new rules are on the books, Singapore doesn’t appear to be cracking down very harshly on property owners with listings that are in violation of those rules.
One issue that needs to be straightened out is how home-sharing businesses and the property owners that participate with them should be taxed. Short-term rentals don't fit into traditional categories that would normally face resort taxes or investment-property taxes. However, the overall belief among authorities in places that are seeing a boom in short-term rentals is that these properties should be taxed in some special category beyond just traditional property tax.
A few months ago, it was announced that the government was thinking of creating a “new class” of private homes. These homes would be approved for short-term rentals. Would these properties be sold at a higher price, since residents would be able to make more money out of them by renting them out on a short-term basis? How would that affect the rest of the private property market? How would the government regulate the market and stop those in non-approved residences from doing the same? Would these short-term rental properties turn into backpacker ghettos? It seems that the government, in lowering the minimum rental period, has accepted that it was not a feasible idea.
Even though Singapore recently placed limitations on how long residents can rent out their properties to visitors. However, many short-term rental agencies continue to list available properties for stays that are much shorter than the three-month minimum. This shows a growing demand for short-term leases. More are visiting Singapore for a few months, e.g. foreign students studying at tertiary or private schools in Singapore for just one semester and need to rent a room for only a few months, or foreigners seeking medical assistance in Singapore and staying for a few weeks or months. There are also foreign interns who take on work experience stints of just a few months.