Living in one of the world’s most expensive cities has become even more expensive, with the rental price index of Singapore up by nearly 10 per cent.
The Economist Intelligence Unit ranked Singapore alongside Paris as the second most expensive city in the world for 2021, outranked only by Tel Aviv, Israel.
This means that rental rates for homes have now risen to their highest level in seven years, according to a March 3 Reuters report.
Reuters says that based on data from the government, for the fourth quarter of last year, the rental price index of private residential properties increased to 114.2, which is 9.9 per cent higher than in the same period a year before.
Home rental prices have gone up despite Singapore’s population actually shrinking in the last two years, Reuters pointed out.
Part of the problem is that the construction industry has been plagued with delays due to supply chain issues and the shortage of foreign workers resulting from travel curbs and border closures arising from the Covid-19 pandemic.
At the same time, demand for rental units for both HDB flats and private condominiums has gone up.
Add to this the number of people in Singapore who have needed to extend their leases in rented units while waiting for their own flats to be finished, while simultaneously, fewer rental units are available because some landlords have sold their properties to cash in on higher property prices.
Another factor adding to the increase in demand for rental units is the number of Singaporeans living overseas who decided to come home because of the pandemic.
The Reuters report quoted Lee Quane, who works at relocation firm ECA International, as saying that for this year, expatriates will likely need higher salaries or better overall packages. It sees rental rates going up by 8 to 12 per cent this year.
In 2021, that increase was at 7 per cent.
Rental demand in Singapore is expected to remain high until construction catches up.
On Wednesday, Finance Minister Lawrence Wong told Parliament that Singapore’s foreign worker shortage will be filled “within the next few months”.
Rounding up the Budget 2022 debate on Mar 2, his first as Finance Minister, he said that as border restrictions ease, the Government aims to redress the shortage of foreign workers, giving priority to the construction, marine and process sectors.
Mentioning that “a key concern for many businesses” has been manpower availability, the announced, “We should be able to clear the shortages within the next few months.”
/TISG