Jakarta, CNBC Indonesia – Foreign residents in Singapore continue to feel housing rental prices continue to soar and show no signs of returning to pre-pandemic prices soon.
Whether renting a room, apartment or house, longtime expats living in Singapore are digging deep into their pockets and making drastic changes to cope with rising rents.
According to data from the Singapore City Redevelopment Authority rental index, the prices of all private residential properties jumped 29.7% year-on-year (YoY) in 2022 – the highest since 2007.
Several foreigners living in Singapore say their landlords are taking advantage of the overheated property market to push up prices, with some doubling rents.
Although the pace of rising rents appears to be slowing, landlords can still expect double-digit price growth.
“If rents continue to grow steadily, more people will swallow the bitter pill and buy properties before paying higher rents,” said Head of Asia-Pacific Research at Knight Frank, Christine Li, quoted from CNBC International, Saturday (15/15/2019). 4/2023).
Even if rents correct, it could be mild and unlikely to significantly retrace the gains that have taken place since 2021.
But some industry experts say prices may drop later this year.
“Relief is expected to come only from the second half of 2023 when a slowing economy and a collapse in the technology sector start to work their way through the demand side of the rental market,” said Alan Cheong, executive director of research and consulting at Savill Singapore.
“However, even if rents correct, it could be mild and unlikely to return significantly to the gains that have occurred since 2021,” he told CNBC.
Some expats in Singapore say landlords are demanding more than market rates, and many are trying to find new ways to avoid rising rents.
Francesca, an Indonesian expatriate living in Singapore with her family, her lease ends this month. At the beginning of the year, the landlord asked twice as much to extend his lease.
The 34-year-old woman said her landlord initially asked for a 60% rent increase, but later increased it to 100%.
“Every time we negotiated, he raised the price … We were really upset because it was unfair,” said Francesca.
He then added that there were newer apartments with better amenities down the street that cost less than the owner asked for.
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Experts list several elements that have contributed to skyrocketing rents, including the lingering effects of the pandemic.
“A confluence of factors ranging from Gen Y and Z wanting to escape their parents to work in the privacy of their own homes, to an influx of foreign professionals, has driven demand,” said Savills’ Cheong.
Singapore’s reputation as a “safe haven” during the pandemic has soared as foreigners have moved to the city-state to escape tough policies in China and Hong Kong, said Knight Frank’s Li.
In addition to rising demand, labor shortages in the construction industry during the pandemic have also contributed to delays, exacerbating supply problems in the housing market.
“On the supply side, the pandemic causing new completion delays has resulted in limited stock of rental housing units,” Cheong noted.
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