The increase in qualifying salary for Employment Pass (EP) and S Pass holders, announced at Budget 2026, may influence the hiring of foreigners. This may have a knock-on impact on tenant demand for both HDB flats and private residential properties, says Mark Yip, CEO, Huttons Asia.
The minimum qualifying salary for EP holders will increase from $5,600 to $6,000, announced Prime Minister and Finance Minister Lawrence Wong at Budget 2026 on Feb 12. EP holders in the financial services sector will maintain a higher minimum qualifying salary, which will rise from $6,200 to $6,600.
Meanwhile, the minimum qualifying salary for S Pass holders will increase from $3,300 to $3,600. S Pass holders in the financial services sector will similarly face a higher minimum qualifying salary than those in other sectors, which is set to rise from $3,800 to $4,000.
The changes will apply to new EP and S Pass applications from Jan 1, 2027, and to renewal applications from Jan 1, 2028.
The adjustment comes at a time when the supply of HDB flats fulfilling the five-year minimum occupancy period (MOP) and completed private residential properties is on the uptrend, adds Yip.
According to Huttons, the supply of private residential homes will rise to 8,354 units in 2027 from 6,067 units in 2026, an increase of 37.7%. This will further increase to 9,687 units in 2028.
See also: Government to raise local qualifying salary for full-time local employees to $1,800 this year
Similarly, in the HDB market, the number of flats fulfilling the five-year MOP will rise to 18,939 flats in 2027 from 13,484 flats in 2026, an increase of 40.5%. This will further increase to 21,393 units in 2028.
See also: OCR, landed homes lead private residential price rise in 2025: URA
Rents of HDB and private residential properties may face downward pressure of up to 3% in 2027 and 2028 if demand fails to keep up with supply, says Yip.
URA data
Rentals of non-landed and landed properties generally increased in 2025, according to 4Q2025 statistics released by URA on Jan 23.
In the prime Core Central Region (CCR) and city-fringe Rest of Central Region (RCR), strong net demand pushed vacancy rates down to 8.8% and 6.0% respectively in 4Q2025.
Conversely, in the suburban Outside Central Region (OCR), rents fell by 2.0% q-o-q despite having the tightest vacancy rate on the island, at 4.9%.
