Singapore's soaring rents might hamper the country’s plan to oust Hong Kong as finance hub

Singapore, which has long been a popular destination for expatriates, is experiencing a surge in rental prices due to a shortage of housing supply and an influx of foreign talent. This has caused concerns about the city-state's competitiveness as a financial hub and its ability to attract and retain top talent. Experts warn that the high cost of living could lead to a brain drain as some expats may choose to move to other, more affordable locations.

According to reports, an expat who did not wish to be identified, moved from Hong Kong to Singapore two years ago to provide more space for her growing family. She is now planning to move back to Hong Kong due to a 61% increase in rent on her four-bedroom flat and the high and rising cost of living. She says that her experience of the two cities has been an eye-opener, and that the cost of living in Singapore is higher than many people realize.

This sentiment is echoed by many expats in Singapore, where a lack of housing supply due to construction delays during the pandemic, and a wave of new arrivals from places including Hong Kong, China, Europe and Japan last year, pushed residential rents to the highest on record, according to the government's private residential property rental index. Rent per square foot in some central areas has overtaken Hong Kong for the first time, data shows. Analysts warn prices could rise up to 20 per cent again this year as real estate agents report bidding frenzies for desirable properties.

Singapore's government has been reluctant to help a mostly affluent minority. In November, in response to questions from members of parliament, it said rent was only one factor for those considering a move to the city-state. According to experts, the high cost of living, in spite of low taxes is something to be feared as it affects foreigners the most. Approximately, eighty percent of Singaporeans live in lower-cost public housing while majority of the expats will in public housing and send their children to public schools.

Real estate agents agree there is a problem. While sharing their stories, they talk about bidding wars that have turned bizarre leaving all parties involved distraught. An agent of ERA recently made headlines when she asked eleven Chinese tenants to vacate their overcrowded flat in a public housing unit.

The situation in Singapore underscores the challenges faced by many cities in Asia as they seek to attract and retain foreign talent while also maintaining affordability for their residents. The pandemic has only served to exacerbate these challenges, with many cities experiencing a surge in rental prices as a result of increased demand and supply.

Next (Ravi PNC Menon resigns as a full-time director at Sobha Limited)

Singapore's soaring rents might hamper the country’s plan to oust Hong Kong as finance hub

This Month

Overview

Explore

Join Us