Less Than 2.9 Million Won Monthly Rent Contracts Account for Only 12%
Foreigners' Housing Burden Rapidly Increasing
As housing rents in Singapore soar, even apartments with monthly rents of around 3 million KRW are rapidly disappearing. The surge in housing prices, driven by Chinese buyers shopping for Singapore real estate, has dealt a direct blow to foreign residents?who make up the majority of rental demand?facing skyrocketing living costs in Singapore.
According to Bloomberg on the 8th, contracts with monthly rents below 3,000 Singapore dollars (approximately 2.9 million KRW) accounted for 12% of the entire Singapore housing rental market from January to April this year.
In contrast, from January to April 2021, over half (54%) of new rental contracts were traded at monthly rents below 3,000 Singapore dollars, indicating a significant drop in this proportion in just two years.
Bloomberg reported, "Even if you find a home with rent below 3,000 Singapore dollars, it is mostly a one-bedroom apartment," adding, "It is becoming increasingly difficult to find larger homes suitable for families to live together."
The average rent for housing in Singapore has also risen sharply. The average monthly rent for contracts signed up to April this year was 5,200 Singapore dollars (about 5 million KRW), a significant increase from 3,580 Singapore dollars (about 3.5 million KRW) two years ago. Since 2018, Singapore housing rents have increased by 65%, surpassing London (24%), New York (21%), Sydney (18%), and Dubai (17%). Meanwhile, Hong Kong, Asia’s financial hub, saw rents decline by 6% during the same period.
The surge in Singapore housing prices is the result of a real estate buying frenzy among Chinese investors combined with a supply shortage. According to the Urban Land Institute (ULI), the median home price in Singapore last year rose by more than 8% year-on-year to 1.2 million USD (about 1.565 billion KRW), overtaking Hong Kong to rank first in the Asia-Pacific region.
This directly translates into a burden on foreign residents, who constitute the majority of rental demand in Singapore. About 80% of Singapore’s population lives in public housing, and 9 out of 10 Singaporean citizens own their homes.
However, there are expectations that the rapid rise in rents will ease in the second half of this year as the Singapore government expands housing supply.
The Singapore government plans to supply 40,000 housing units this year and about 100,000 units by 2025. Indranee Rajah, Minister in the Prime Minister’s Office and Second Minister for National Development, stated, "We are well aware of tenants’ concerns," adding, "We expect the rental market to ease within the next few quarters. A significant number of private and public housing units will be launched in the coming years."
Bloomberg Intelligence (BI), Bloomberg’s economic research arm, predicted that the rent increase rate in the second quarter will remain below 5%.
Marcus Lu, CEO of real estate firm Savills Singapore, forecasted, "Rents will rise by 5-10% this year," and added, "Both local Singaporeans and foreign residents will feel more comfortable."
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