Singapore Apartment Rents Highest in 6 Years
Rents have jumped to a six-year high, and analysts anticipate further increases as demand outweighs supply. That’s adding to costs for residents of the financial hub, especially expatriates, at a time when inflationary pressures are building. The Covid-19 pandemic can be blamed for much of the gains: a shortage of migrant workers has contributed to construction delays, forcing people to lease while waiting for apartments to be built. Younger Singaporeans have been moving out of the family home in search of more space to work remotely. And homeowners returning from stints abroad are taking back their units, reducing the rental stock and pushing tenants into the market. Apartments costing S$2,500 to S$4,000 ($1,800 to $2,900) in monthly rent may face the greatest upside pressure amid high demand, Cheong said. This year alone, some units have already seen rental growth of at least between 10% and 15%. The central bank has also sounded caution. Home rentals jumped 7.1% in the first nine months of 2021, thanks to a drop in vacancies, the Monetary Authority of Singapore said in its Financial Stability Review this month. While supply is still somewhat adequate, “further declines in the vacancy rate could trigger a sharper increase in rentals,” the central bank said. An index of rental prices jumped to 111.3 in the third quarter of 2021, the highest since the first three months of 2015, Urban Redevelopment Authority figures show. Singapore is tied with Paris as the world’s second-most expensive city, according to the Economist Intelligence Unit’s cost of living rankings for 2021. The Southeast Asian nation also has one of the priciest property markets. A surge in home prices and sales prompted authorities to impose a new round of cooling measures earlier this month, mainly targeting purchases by investors and foreigners. Unlike other global financial centers like New York and London, residents of the tiny island haven’t had the choice to move to the countryside to ride out the pandemic. That means rental demand has stayed high, allowing landlords to increase fees. Expatriates in the city-state are being hit the hardest given that many of them prefer private apartments. Purchasing a home in Singapore is becoming more costly for foreigners after the government hiked stamp duties as part of the new cooling steps. Some expats who recently relocated to the city are staying put in serviced apartments for now while scouting for good rental C.
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