The increasing cost of rental for residential and office spaces in Singapore is causing concerns for both international and local business communities. The rising costs are putting pressure on businesses to balance their profitability in the face of the increasing cost of doing business in Singapore.
To assess the severity of the impact of rising rental costs on business operations in Singapore, the European Chamber of Commerce, Singapore (EuroCham) conducted a survey in collaboration with 14 European National Business Groups, as well as the Singapore International Chamber of Commerce, the British Chamber of Commerce Singapore, and the Canadian Chamber of Commerce in Singapore.
The survey received responses from 268 businesses from diverse industries and sizes.
The survey found that for 50% of employees who renewed their residential housing lease this year or last year, the extent of the increase in their rental costs was more than 40%.
Additionally, 62% of these employees did not receive any support or less than $1,500 per month from their companies to meet the rising rental costs. This has caused anxiety and psychological distress among 97% of the employees surveyed.
The rising costs of rent have had a direct impact on European expatriates and businesses in Singapore, with 69% of companies surveyed indicating that they would be willing to relocate their personnel out of Singapore if the costs of operations do not decrease or if they do not receive assistance from the government.
Expats looking to move out of Singapore
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.
Rental for office space has also been experiencing an upward trend, although rental retail spaces have been on the decline.
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.
