Ben Dunn and his family have lived in Singapore for the past 16 years, considering themselves “Aussie-poreans”. However, after their monthly rent for their condominium rose from 7,000 to 11,000 Singapore dollars ($5,242 to $8,238) in a matter of months, they have made the difficult decision to return to Australia when their lease ends in June. Dunn is among a growing pool of expats leaving Singapore because of soaring rents, prompting concerns about whether the Southeast Asian city-state is at risk of losing its allure as a regional business hub.
Average rental prices in Singapore surged by 30% in 2022 – the fastest pace in 15 years, according to data from Singapore’s Urban Redevelopment Authority. The surging prices have been blamed on a range of factors, including a shortage of housing supply due to pandemic-caused construction delays and strong demand from companies and talent to relocate to the city, driven in part by China’s crackdowns on private industry and Hong Kong.
Seven in 10 foreign and local businesses are ready to relocate staff if costs do not come down, while half of expats who renewed their residential lease recently saw their rent rise by more than 40%, according to a survey by the European Chamber of Commerce in Singapore (EuroCham). APAC Relocation, an international relocation company, said it has seen about 10% of its clientele move because of rising rents during the past five to six months.
Melody, a Taiwanese national in her 30s, arrived in Singapore two years ago with a promising career in the tech industry and dreams of putting down roots in the city with her partner. But last year, she was retrenched in recent tech layoffs and the monthly rent for her two-bedroom apartment in Newton was raised from 4,000 to 6,500 Singapore dollars ($3,000 to $4,870). She has heard similar stories of friends’ landlords raising rents by 60 to 100%. For Melody, the situation presented the difficult choice to either stay on and “endure the situation with barely any savings”, or move somewhere with a lower cost of living. By the end of April, she plans to return to Taiwan.
Achieve Group chief executive Joshua Yim has witnessed companies turning to creative solutions to handle the rising costs. Some multinational corporations with regional headquarters in Singapore are relocating their staff to cheaper cities like Kuala Lumpur, Jakarta and Bangkok, where they can work remotely and fly into the city-state only when necessary. Yim has seen numerous expats leave Singapore because of escalating rents in the past six months, with others negotiating for better packages, “having done their research on Singapore”.
In response to concerns that soaring rents could affect Singapore’s ability to attract foreign talent, the government has insisted it is closely monitoring the property market, including the residential rental market. National Development Minister Desmond Lee said in a response to parliamentary questions last November that “global talents consider many factors besides rental prices when making relocation decisions”.
While rising costs may pose a risk to Singapore’s attractiveness, companies are strongly aware that a variety of factors come into play when determining their country of choice for investment. “What continues to distinguish Singapore is our ready access to global talents, robust infrastructure and the institutions that can protect the value of business assets,” said Albert Tsui, executive director of advocacy and policy at the Singapore Business Federation. “Singapore’s stable political climate and pro-enterprise environment also promote business sustainability, which makes us an attractive destination.”