Singapore has been ranked as the ninth most expensive city to rent in a new report – but evidence from recent weeks suggest rental prices may have already dropped by 20 percent since the start of the year.
One agent told PropertyGuru she had just signed a deal to let a property that was previously priced at S$24,000 per month for just S$19,000 per month. The landlord had previously rejected a S$22,000 offer just a matter of weeks ago.
These examples are not unique – and calls to other agents who specialise in rentals indicate that prices have plunged in the opening weeks of the year. Many are reporting a lack of tenants – especially foreigners – and a certain degree of panic from landlords who are sitting on expensive properties with no prospect of an immediate income.
Echoing these experiences is real estate salesperson Deborah Law of Expat Realtor. She told PropertyGuru: "There are new companies still moving their employees to Singapore, but more and more people are being put onto local packages and downsizing, hence big ticket properties are staying longer on the market. In my experience this year, rental prices are dropping as landlords are worried about more supply than demand right now."
The ECA International report collated rental prices for three-bedroom properties during September 2011. It ranked Singapore as ninth globally and the third most expensive city in Asia behind Hong Kong and Tokyo.
ECA's research also noted that more than 90 percent of companies sending employees on international assignment contribute to the cost of accommodation in the host country. Expatriates tend to gravitate towards particular areas within cities because of the location of international schools, embassies or social focal points. These often tend to be the more expensive, prestigious areas in a city. "Depending on how companies provide housing or allowances to their assignees, currency movements can have a big impact on such costs for a company," explained Lee Quane, Regional Director, ECA International, Asia. "In Singapore rents have risen by just 3 percent in local currency, but the strength of the Singapore dollar means that when we convert these prices into U.S. dollars for comparison, the increase stands at 15 percent. Companies need to regularly review their housing allowances and polices in order to keep up with fluctuations."
Official data from Singapore's Urban Redevelopment Authority (URA) for first quarter rental statistics will not be published until the end of April.
Most expensive cities in Asia to rent a three-bedroom property:
1. Hong Kong 2. Tokyo 3. Singapore 4. Mumbai 5. Seoul 6. Shanghai 7. New Delhi 8. Beijing 9. Taipei 10.Jakarta Related Stories: Majority expect property prices to fall due to ABSD
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