As Singapore tightens its work pass salary requirements starting in 2027, the city-state’s rental market faces potential headwinds that could reshape demand across both HDB and private housing segments.
The government announced significant increases to minimum qualifying salaries for both Employment Passes and S Passes, affecting nearly 380,000 foreign professionals currently working in Singapore as of June 2025.
Employment Pass holders, who typically rent private condominiums or higher-end HDB flats, will see their minimum qualifying salary jump from S$5,600 to S$6,000 for general sectors, representing roughly a 10-12% increase.
Those working in financial services face an even steeper threshold of S$6,600, up from S$6,200.
For professionals aged 45 and above, the bar climbs dramatically to S$11,500, or S$12,700 in financial services.
These changes take effect for new applicants on January 1, 2027, with renewals following suit in 2028.
S Pass holders, who generally occupy more modest rental accommodations, aren’t spared either.
Their minimum qualifying salary rises from S$3,300 to S$3,600, with financial sector workers needing S$4,000.
Older S Pass candidates face requirements reaching S$5,100, or S$5,650 in financial services.
With 177,600 S Pass holders potentially affected, the mid-tier rental segment could experience noticeable cooling.
The timing matters considerably since existing work pass holders won’t face these new thresholds until their renewals come up in 2028.
This creates a gradual phase-in rather than an immediate shock, but the direction is unmistakable.
Companies unable or unwilling to meet these elevated salary requirements may reduce their foreign workforce, directly translating to fewer tenants seeking rental properties.
The government has sweetened the deal somewhat by increasing Progressive Wage Credit Scheme co-funding from 20% to 30% for 2026 and 2027, helping employers manage rising wage costs.
The scheme will extend through qualifying year 2028, though co-funding support drops back to 20% in that final year.
Additionally, the local qualifying salary for firms hiring foreign workers increases from S$1,600 to S$1,800 from July 2026, ensuring Singaporean workers benefit alongside policy adjustments.
Employment Pass holders number approximately 21,100 as of June 2025, representing a concentrated segment of the professional rental market.
Still, landlords should brace for potential softening in rental demand as these stricter requirements filter through the housing market over the coming years.
The higher salary thresholds may also push foreign workers earning in the mid-range to prioritize cost management by opting for HDB flats over private condos, potentially shifting demand patterns across different housing segments.
