Recently, a 5-room flat at 42a Margaret Drive listed for $1.5 million on property portal raised Singaporeans’ eyebrows, wondering if resale prices of HDB flats moving even closer to million dollars, surging price of overall public housing property.

It’s clear how expensive HDB resale flats are nowadays, with prices increasing for the 11th consecutive quarter (according to Q4 2022 HDB Public Housing Data statistics).

Rising costs and surging demand have also pushed residential rents to their highest on record.

The Financial Times reported that the lack of housing supply caused by delays in construction, coupled with the influx of foreigners, has pushed rental prices to the point where they have overtaken Hong Kong’s for the first time in some central areas.

Last month, the Urban Redevelopment Authority(URA) released the real estate statistics for the fourth quarter of 2022, which shows that rentals of non-landed properties increased by 7.5%, compared to the 8.3% increase in the previous quarter.

For the whole of 2022, rentals of landed properties increased by 28.1% while rentals of non-landed properties increased by 29.8%.

Even rentals are becoming unbearable for expats

Some expats, who were previously interviewed by FT and believed that Hong Kong was the most expensive city, are now considering moving out of Singapore due to the rising cost of living and high rental prices.

For example, a British mother of three arrived in Singapore from Hong Kong two years ago, hoping to find more living space for her growing family.

However, the rental for their four-bedroom flat has now risen 61%, and they have decided to move back to Hong Kong as the cost of living in Singapore continues to increase.

Another 29-year-old Indian, who works as front-of-house staff at a popular restaurant in Chinatown, is now moving to Australia with his fiancée after his S$500 rent more than doubled.

“I can’t see myself getting ahead here, I have no savings now. In Australia, you can afford a car and have a life,” he told FT.

EP and S Pass holders increased 4.5% to 338,000

Two years ago, the Ministry of Manpower (MOM) announced an increment of the minimum wages for the S Passes and E Passes, which are now pegged at S$3,000 and S$5,000, respectively.

However, the government’s measures have not deterred the influx of expats into the city-state.

According to a CNBC report in April 2022, some residents of Hong Kong have been relocating to Singapore due to strict Covid restrictions and rising rental prices in Hong Kong.

Visitor arrivals from Hong Kong to Singapore nearly doubled during that period, with some intending to settle down in Singapore and turning to co-living spaces or serviced apartments.

The FT article also mentioned that Employment Pass and S Pass holders increased 4.5% to 338,000 in the 18 months until the end of June last year.

Although Prime Minister Lee Hsien Loong once promised that the government “must address Singaporeans’ anxieties over foreign work pass holders,” it has been reported that while local IT graduates are currently having a hard time finding tech jobs, engineers are still being transferred from India to work in Singapore.


Unreasonable rents

Real estate agents have reported an increase in tenant complaints, with some landlords asking for unreasonable rents, with some even asking for a 60% increase in rent.

They also warn that prices could rise as much as 20% again this year, making it difficult for Singapore to become Asia’s dominant financial hub and attract the best talent, as reported by the FT article.

It is not surprising that some landlords dare to list a coffin-size room, which seems to fit only one single bed, online, and rent it out for S$750.

Some expats are willing to sign a S$7,000 a month, one-year lease for a two-bedroom privately-owned apartment close to the central business district.

As Nicholas Mak, head of research and consultancy at the ERA Realty Network, told FT, “things boil fast” when pressure is applied. It is no doubt that Singapore’s limited land size and a lack of spare capacity result in a rapid increase in property prices here.

The price surge will certainly impact the overall market, including HDB resale flats, which are moving towards million-dollar values that could hardly be affordable to ordinary Singaporeans.

While Hazel Poa, Non-constituency Member of Parliament(NCMP) from Progress Singapore Party (PSP), urged the government to increase the supply of new flats, National Development Minister Desmond Lee had defended that an oversupply could put downward pressure on the Housing and Development Board (HDB) market and incur costs from the vacant housing stock.

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