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Singapore rents jump to six-year high, hitting expats hard

Lopsided supply and demand could exacerbate the problem

The Pearl Bank Apartments, The Ardmore Residences, and The Sail at Marina Bay (Wikipedia, iStock. Photo illustration by Priyanka Modi.)
The Pearl Bank Apartments, The Ardmore Residences, and The Sail at Marina Bay (Wikipedia, iStock. Photo illustration by Priyanka Modi.)

Singapore rents are too damn high.

Rents in the city-state have jumped to a six-year high and will probably keep rising thanks to construction delays fueled by a lack of migrant workers, younger people moving out of family homes and homeowners returning from abroad, Bloomberg reported.

It’s another reason why Singapore is tied with Paris as the second most expensive city after Tel Aviv. Home prices have already jumped so much that authorities imposed a new round of cooling measures that mostly target purchases by investors and foreigners.

Rising prices, in turn, force expatriates into the rental market. While foreigners can rent public housing units, they prefer private apartments equipped with swimming pools and tennis courts, Orange Tee & Tie’s Christine Sun told Bloomberg.

Unlike other financial centers like New York and London, the island nation is also limited by its geography: Residents can’t ride out Covid by moving to the countryside, stoking rental demand.

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Apartments that cost between $1,800 and $2,900 a month will probably have the fastest increases in rental rates as demand keeps rising. Some rents in that range have jumped by 10 to 15 percent in the last year alone.

The central bank said home rentals rose by 7.1 percent in the first nine months of 2021 due to a drop in vacancies. While the bank said supply is “somewhat adequate,” further declines in the vacancy rate move those rates higher.

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Analysts expect rental supply to remain tight in the new year as building delays persist because Singapore limits the number of overseas workers amid concern over the omicron variant.

[Bloomberg] — Victoria Pruitt