Rent in Singapore reaches 7 year high, despite decreasing population

Home rentals in Singapore, already among the world’s most expensive locales, have increased to a seven-year high, despite the city-state’s population decreasing in the last two years.

The rental price index for private residential buildings rose to 114.2 in the fourth quarter last year, an increase of 9.9% compared to the same period last year, as demand outstrips supply, affected by construction delays from Covid-19 restrictions, even as the country opens up.

In Singapore, the pandemic has caused a shortage of workers and resources, causing the construction of private apartments and public Housing Development Board flats to be delayed.

Analysts attribute the rise in the rental market to a variety of factors. Some Singaporeans are renting while their buildings are being built, and rising real estate prices have pushed some owners to sell their units, limiting rental supplies.

During the outbreak, many Singaporeans returned to the country and reclaimed the units that they rented out. Many local residents are also leaving their family homes and renting their own office spaces to work from home.

Meanwhile, the inflating real estate market is increasing the cost of living in Singapore, which the Economist Intelligence Unit regards as the second-most expensive city to live in, on par with Paris.

The average rent for residential units fell to 6% in the fourth quarter of 2021, down from last year’s 7%. Analysts predict that rents could climb by 8% to 12% in 2022 as Singapore lowers border controls, allowing more foreigners to enter the country.

Despite the fact that many expats have left Singapore due to the pandemic, rents have continued to rise. The hot rental record is likely to last a more few years until more buildings are built. But even as new buildings rise, Singapore isn’t getting any bigger.

SOURCE: Bangkok Post