SINGAPORE: Residential rents in Singapore rose to a three-year high in 2019, with prices boosted by strong overseas demand that signals the city-state’s continuing appeal among expatriates.
Rents climbed 1.4% last year, according to real estate agency OrangeTee & Tie Pte, using data from the Urban Redevelopment Authority.
The number of leases signed reached a decade-high 93,920 units last year, said Christine Sun, head of research and consultancy at OrangeTee & Tie.
Demand for rental apartments in Singapore mostly comes from expatriates, who find it a cheaper option than buying outright because of hefty stamp duties levied on foreigners.
“Some expats could be here for short-term work assignments, therefore leasing will be a more logical and flexible choice,” Sun said.
Conversely, the majority of Singaporeans live in public housing and renting is seen as cost-inefficient due to high prices.
The city-state continues to lure high-skilled expatriates as it invests in sectors such as fintech and health. Its political stability, high education standards, green spaces, low crime and efficient infrastructure make it appealing for foreigners to migrate.
And rents in Singapore are still cheaper than Hong Kong and New York. A Deutsche Bank report last year puts Hong Kong in pole position, followed by San Francisco and New York. Singapore rose one spot to 11th.
Even as the city-state braces for growing fallout from the coronavirus outbreak, analysts forecast rents could rise further this year between 3% and 5%.
“The strong influx of overseas workers in the new economy and companies seeking to de-risk from single country concentration should spur rents in 2020,” said Alan Cheong, executive director of research at Savills Plc.