World

Rent in Singapore reaches seven-year high

Home rents have risen to a seven-year high in Singapore, which is already one of the world’s most expensive cities. This is despite the city-state’s population has dipped in the past two years.

The rental price index of private residential properties increased to 114.2 in the fourth quarter of 2021, up 9.9% from the same period a year earlier, according to Singapore government data, as demand outstrips the supply, which has been hindered by construction delays due to Covid-19 curbs.

“I need to win the lottery,” said American Aimee Yager as she described her weeks-long house hunt in Singapore and only finding a new 4-1/2-bedroom home for her family of four after raising her monthly rental budget to about S$10,000 (US$7,400).

Shortages of workers and materials because of the coronavirus pandemic has delayed the construction of private condominiums and public Housing Development Board (HDB) apartments. At the same time, rental demand is rising

Some residents are renting while they wait for their apartments to be completed. Property prices have spiked, which has caused some landlords to sell their property and reduce the rental stock.

Singaporeans Sebelle Ho and her fiancé, who will marry this month, just signed a S$2,800 ($2,062 US) lease on a two-bedroom HDB apartment, where they will live while waiting for their resale public housing flat to be ready. But Ho said her hunt for the six-month rental had “not been easy at all,” recalling her stress after a potential landlord pulled out of their agreement.

The surging property market is adding to the cost of living in Singapore, ranked by the Economist Intelligence Unit as the second-most costly city to live in along with Paris. Inflation has climbed to multi-year peaks this year, while fuel and electricity costs are forecast to increase further.

“If companies are recruiting or retaining expatriates in 2022, they’re likely to be needing to pay higher salaries or higher overall packages,” said Lee Quane at relocation firm ECA International.

The vacancy rate of private residential units shrank to 6% at the fourth quarter of 2021 from 7% a year ago, government data showed. Rents have also risen despite expatriates leaving Singapore amid the pandemic. Analysts expect rents to rise 8% to 12% this year, as Singapore eases border restrictions, allowing more foreigners into the country.

The hot rental market is likely to continue for a couple of years until construction catches up, said Christine Sun at real estate consultants OrangeTee and Tie.

Briton Arabella Lambe’s family had to look for a new home after their landlord asked for a 50% increase to renew their current S$8,000 lease on a 4,500 square foot (418 square metres) house. When she saw a listing for a 3,000 square foot house in a more central part of town, she snapped it up within hours. But the rent is still slightly more than the previous one.

“We’re moving into a smaller house. So, I’m hoping that our huge electricity bills that we’ve been paying are going to be reduced,” said Lambe. “We’ll just have to sort of cut back on things.”

ARTICLE: PAUL MURDOCH 

MANAGING EDITOR: CARSON CHOATE

PHOTO CREDITS: THEINDEPENDENT.SG

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Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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