Rising rent distresses expats in Singapore: German companies and employees feel the pinch as private housing rents surge at fastest pace in 15 years

Rising rent distresses expats in Singapore: German companies and employees feel the pinch as private housing rents surge at fastest pace in 15 years

Rising housing rents have become a major concern for expats living in Singapore, with German companies and their employees among the latest to feel the pinch.

The Straits Times reported on a survey conducted by the Singaporean-German Chamber of Industry and Commerce (SGC) in February found that almost half of German employers in Singapore surveyed (44 per cent) where that “psychological distress and lower work performance is visible among staff” due to the unpredictable housing situation.

In addition, half of the firms polled anticipate rents rising by 30 to 50 per cent in 2023, while 16 per cent see even higher increases of more than 50 per cent. This is after private housing rents surged by nearly 30 per cent in 2022, the fastest pace in 15 years.

The survey also revealed that 43 per cent of German firms polled would consider relocating certain business functions out of Singapore to other countries such as Malaysia, Vietnam, and Thailand due to increasing costs and difficulty in recruiting talent.

Higher costs are coming from rising salaries in particular, and also inflation, travel as well as rental for business spaces and housing allowances, according to the survey report.

Moreover, more than a third of the companies polled (37 per cent) found it more difficult to obtain Employment Passes (EP) for their foreign employees during the past 12 months in Singapore.

At the same time, 65 per cent of companies wish to hire more workers in Singapore but find it challenging to find qualified talent in fields such as engineering and information technology as well as for regional roles or leadership and management roles.

However, despite inflation, costs, and geopolitical challenges, half of the German firms polled (51 per cent) remain optimistic about the economic outlook. The firms see great market potential mainly within Southeast Asia, with India and Greater China viewed as attractive markets with high growth potential.

“This survey shows clearly that the current economic challenges remain,” said Mr Jens Ruebbert, SGC president. “Nevertheless, our members here in Singapore in general have an optimistic outlook.”

“This should be a commitment to preserve and build on Singapore’s proven location qualities for businesses: Predictability, openness to foreign talent, the secure legal environment, freedom from corruption and reliability,” he added.

Expats looking to move out of Singapore

An expat, who goes by the name salshoult on her TikTok account, recently shared her experience of an unreasonable rental hike by her landlord. The landlord informed her that her rental would “ONLY” increase by 75%, and if she chose not to accept, he would put it on the open market at a 100% increased rate.

The rising housing rents are not just affecting non-Singaporeans, but also some Singaporeans who have to rent in the private market while waiting for their Build-to-Order (BTO) flats. They could also be those who were unfortunate to have been caught in limbo after disposing of their private property last year when the Government announced a wait-out period of 15 months for owners or former owners of private residential property before they can buy a non-subsidised HDB resale flat.

According to the Urban Redevelopment Authority (URA), rentals of non-landed properties increased by 7.5% in the fourth quarter of 2022, 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%.

The lack of housing supply caused by delays in construction, coupled with the influx of foreigners, the lack of housing supply caused by delays in construction has pushed rental prices to the point where they have overtaken Hong Kong’s for the first time in some central areas. This has resulted in many expats contemplating moving out of Singapore due to the rising cost of living and high rental prices.

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 warned that prices could rise as much as 20% again this year.

Some expats, who were previously interviewed by the Financial Times 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 the Financial Times.


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