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The View | Demand for Singapore rental property is surging amid supply shortage and expat arrivals
- Leasing activity in Singapore has been frantic as pandemic-induced domestic and external factors cause dramatic shifts in supply and demand
- Although rents are booming and schooling, tax and immigration pressures are taking the shine off Singapore’s status for expats, an exodus remains unlikely
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Competition for rented properties in the world’s leading cities is increasingly fierce. As pandemic-related restrictions are lifted and urban centres become more appealing again, demand for private rented accommodation is surging.
Last month, Knight Frank published its latest Prime Global Rental Index, which tracks the movement in luxury residential rents in 10 major cities. The fastest growth rates in the first quarter of this year were in New York and London, where rents surged by a year-on-year average of 38.5 per cent and 26.4 per cent respectively.
Yet, a substantial portion of this growth made up for steep declines during the acute phase of the pandemic, with the peak-to-trough fall in New York amounting to 20 per cent. In Singapore, by contrast, the peak-to-trough decline was just 3.4 per cent, by far the lowest among the four fastest-growing cities in the index.
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This makes the strong performance of the country’s rental market all the more impressive. According to ERA Singapore data, private rental values – both luxury and mass market – rose at an annual rate of 12.1 per cent in the first quarter, the first double-digit increase since 2011.
In London and New York, many residents decamped to the suburbs and coastal cities in search of more space. Singaporeans – 80 per cent of whom live in government-built flats, most of them as owner-occupiers – had “nowhere else to run to”, said Nicholas Mak, head of research and consultancy at ERA Singapore.
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Moreover, while many expatriates – who account for two-thirds of renters according to an estimate by online real estate portal PropertyGuru – returned home, a significant portion stayed put. Others were enticed back by the government’s momentous decision last year to reopen the economy and treat the virus as endemic.
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