Making Room for Co-Living: Knight Frank Sees a 32,840-Key Gap in Singapore by 2028

Home ownership has long been the cornerstone of Singapore’s housing model, with nine in 10 resident households owning the homes they live in. Against that backdrop, the emergence of a viable housing format built on shorter leases would have been less obvious a decade ago.

Yet co-living has grown rapidly over the past five years. The potential of this demand was amplified when construction delays and border disruptions hit during the pandemic. The reopening fuelled a rapid recovery in international mobility, and rental market conditions tightened as demand rose across multiple tenant groups. Between 2022 and 2023, the URA private residential rental index spiked sharply, rising by over 40 per cent at its peak.

Direct acquisitions of co-living assets climbed as operators sought to scale their portfolios, while transactions for operating platforms, such as Mitsubishi Estate’s buyout of Habyt, also emerged. Although deal volumes softened in 2025 amid a tightening supply of investable assets, conversion opportunities have revived activity in 2026. In August 2026, CapitaLand and Ascott Trust’s proposed S$134 million acquisition and leaseback of the 212-room Coliwoo Midtown offered a further sign of the sector’s growing institutional appeal.

The sector has continued to expand even after rental market conditions began to normalise, which the author argues suggests demand is supported by longer-term structural drivers rather than a temporary spurt.

International student enrolments continued to grow, and Singapore’s international workforce has remained sizeable, with more than 200,000 Employment Pass holders. But the demand base is broadening beyond the traditional expatriate and student segments. A growing number of local residents are choosing to rent during different life stages, whether while waiting for a new home to be completed, to be closer to workplaces, or to gain greater independence.

Household formation has also shifted. Single-person households now account for nearly one in six resident households, and much of the rise recorded between 1980 and 2015 was repeated in just the last decade. As more people choose to live alone, demand for smaller and more flexible housing options is likely to increase.

An estimated 9,000 to 10,000 co-living keys are now operating on the island.

For these groups, location, lease flexibility and ease of move-in carry significant weight in housing decisions, and these preferences align closely with what co-living operators offer.

Room rentals for co-living and private condominiums with similar attributes are generally competitive. Headline co-living rents can be higher than conventional room rentals, but the comparison narrows once furnishings, utilities, connectivity, cleaning and shorter lease commitments are taken into account.

Increasingly, co-living is finding its way into larger mixed-use developments alongside retail, co-working and other lifestyle amenities. From integrated live-work concepts on Orchard Road to newer accommodation formats, co-living is being reimagined as a lifestyle offering rather than only a housing solution.

The commentary sets this against public housing policy. At the National Day Rally 2026, Prime Minister Lawrence Wong announced a major reset in public housing, raising the monthly income ceilings for Build-To-Order flats and executive condominiums to S$16,000 and S$18,000 respectively, alongside increased ballot priority for young families. The author argues that while this ensures subsidised home ownership remains attainable for the domestic core, the rally left private rental dynamics and immediate alternatives for singles untouched, leaving a structural gap for non-traditional, transitional and single-person households.

The government has actively sought to increase rental alternatives. Aside from higher occupancy caps for HDB flats and private residential properties, the introduction of the Serviced Apartments II framework in 2023 established a clear housing format that sits between traditional residential and hospitality uses.

While SA2 is fundamentally a new housing typology and development framework designed for purpose-built rental accommodation, co-living has largely emerged as an operating platform. The author argues it should be viewed as part of a broader housing continuum alongside conventional private rentals.

Much of the sector’s demand stems from the transitional nature of its tenants, who may eventually gravitate towards options offering greater autonomy, privacy and control. Relative to conventional rentals, a higher tenant turnover is inherent to the model, so sustained demand requires continual replenishment of the tenant base, supported by Singapore’s continued appeal as a global city.

A growing track record of operating performance, an expanding occupier base and policy initiatives such as youth independent-living pilots have strengthened the sector’s investment case.

The sector has demonstrated that growth can be achieved through repositioning existing assets. By converting and adapting underutilised buildings, operators have been able to scale in a land-constrained market, broadening the range of opportunities from direct asset acquisitions and conversions to leasing heritage developments. The author notes this is particularly relevant in a higher interest rate environment, as co-living offers multiple avenues for value creation, from asset repositioning and adaptive reuse to operational execution.

Based on the size and income profile of key renter groups, Knight Frank estimated that Singapore’s addressable demand for co-living will reach about 45,840 keys by 2028. With total co-living keys likely to increase by just about 3,000 to 4,000 in the same period, a market gap of 32,840 keys remains.

The author’s conclusion: Singapore should recognise professionally managed rental housing as a deliberate part of its broader housing and talent strategy. Policymakers can create clearer pathways for converting suitable buildings and developing purpose-built rental accommodation. Owners, operators and investors must in turn demonstrate that the model can deliver quality, transparency and a consistently good living experience, not simply more rooms. “The choice is not between co-living and homeownership. It is whether Singapore’s housing system can offer enough flexibility between them.”