Singapore experienced housing rents reach a 3-year high in year 2019, on the foundation of strong expatriate demand.

From Urban Redevelopment Authority (URA) data, property agency OrangeTee & Tie cited that rents went up 1.4% last year, while the figure for leases inked increased to a 10 year high of 93,920 units.

Rental apartment demand in Singapore mainly come from expatriates, who find it more cost effective to rent than buy a unit outright because of high stamp duties imposed on foreign purchasers. This is costly even for for the affordable Dairy Farm Residences Prices.

“Several expatriates could be staying for short-term work assignments, thus leasing will become a more flexible and logical option,” said Miss Christine Sun, the head of Research and Consultancy at OrangeTee & Tie.

The majority of locals, on the other hand, stay in public housing and consider leasing as an inefficient way of spending given the lofty property prices, said Bloomberg in a report. It makes more sense for Singaporeans to purchase private condos like Dairy Farm Residences to rent out.

The city state attracts highly-skilled foreigners as it continues to pump in capital into sectors like fintech and healthcare. Expatriates find Singapore appealing because of its political stability, low crime environment, efficient infrastructure, high education levels and lots of green natural spaces.

Moreover, rents in the country are less costly as compared to New York and Hong Kong. In fact, a Deutsche Bank report in 2019 listed Hong Kong as the most costly city to lease, with San Francisco and New York in second and third position, respectively. Singapore went up 1 spot to 11th place in the rankings.

Forging ahead, analysts predict rents to increase even more between 3% and 5% in 2020 even as Singapore prepares for a potential fallout from the COVID-19 pandemic.

“The strong influx of foreign workers in the new economy and firms looking to de-risk from a one-country concentration will likely spur rents in 2020,” said Mr Alan Cheong, the Savills Executive Director of Research.

Source: https://www.propertyguru.com.sg/property-management-news/2020/2/186360/singapore-rents-hit-a-three-year-high-as-expat-demands-surges

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