The frenzied scramble for rented property has been one of the most conspicuous effects of the easing of pandemic-related restrictions. The sudden resumption of demand has added to the long list of factors driving up rental prices. Among the most important ones are the lack of supply, the “financialisation” of real estate and, more recently, the
surge in mortgage rates.
New York and London have grabbed the headlines, mainly because rents plunged at the start of the pandemic – particularly at the top end of the market – when many residents decamped to the suburbs and smaller cities. However, over the past two years, rents have recovered rapidly, reaching record highs. In London, four in 10 renters moving home last year chose to leave the capital for cheaper accommodation elsewhere in Britain.
According to an index of prime residential prices in 10 leading cities compiled by Knight Frank, New York and London have witnessed the sharpest recovery in rents since their pandemic low. This makes the blistering pace of rental growth in Singapore all the more remarkable. In the final quarter of last year, the city-state – one of the first countries in Asia to
reopen its borders – overtook New York to post the fastest rental growth, with average rents increasing a staggering 28.2 per cent year on year.
Rents in Singapore’s dominant public housing system have also gone through the roof, up 28.5 per cent last year, data from Singapore property portal SRX shows. Indeed, rents for private homes and government-subsidised apartments surpassed their 2013 peak in March last year and continued to rise in January on a monthly basis.
A confluence of factors – an influx of
foreign workers from a diverse group of countries, pandemic-induced delays in construction, the
dramatic increase in sales prices and the impact of two new rounds of
cooling measures in the sales market introduced in December 2021 and September 2022 – have caused the rental market to overheat, fuelling concerns about rising living costs and the city’s ability to attract and retain talent.
The property boom has contributed to the proliferation in comparisons with Hong Kong, Singapore’s main rival for financial pre-eminence in Asia. According to an analysis by the Post last month
, average rental prices per square foot in US dollar terms in three prominent locations in both cities are
now cheaper in Hong Kong, long a notoriously expensive city.
