The Metropolis Where Rents Rise 60%, 75%, Even 100%
Increases in Singapore surpass those in New York and London; ‘every time we’d counter, he’d just keep going up and up’
BY FELIZ SOLOMONAPRIL 28, 2023
Soaring residential rents are weighing on Singapore’s bid to overtake Hong Kong as Asia’s premier financial hub.
PHOTO: HOW HWEE YOUNG/SHUTTERSTOCK
SINGAPORE—In February, five months before the lease was up on her Singapore condo, Sally Shoult asked her real-estate agent to delicately sound out the landlord about renewing. Then she braced for impact.
“I’d been hearing horror stories,” says Mrs. Shoult, a 39-year-old freelance copywriter from the U.K. “I was of two minds about whether I should even ask.”
Tenants like Mrs. Shoult have reason to dread their turn playing rental roulette: Increases that 18 months ago ran 10% to 20% now can reach a jaw-dropping 100%. Rent for prime residential properties rose faster in the Asian metropolis than in any other city last year, surpassing the annual increases in New York and London, according to the consulting firm Knight Frank.
Increases are steepest for large private condos in central neighborhoods, borne by affluent expats. In a March survey by the European Chamber of Commerce in Singapore, 97% of companies reported “visible anxiety and psychological distress” among staff due to rising costs. Almost 40% said they gave employees at least $1,120 a month in housing aid.
Sally Shoult decided against paying nearly $10,000 a month.
SALLY SHOULT
The hikes are weighing on the city-state’s bid to overtake Hong Kong as Asia’s premier financial hub. Pressed by lawmakers, the Ministry of National Development in November said Singapore remains an attractive destination for global talent, listing such strengths as trade links, high health and education standards and quality of life. The cost of rental housing, it said, is just one factor businesses consider in looking at a potential base.
But as that cost soars, it tests the limits of Singapore’s appeal.
Mrs. Shoult’s agent called back after a few anxious weeks. The good news: The landlord said the Shoults were such good tenants that he’d offer them a 25% discount off his asking price. The bad news: That asking price was double their current rent, which means they’d have to fork out 75% more—bringing their monthly rent close to $10,000.
“Great news,” Mrs. Shoult joked in a widely viewed post on the TikTok video platform. “So generous of him!”
She’s moving out.
The reasons for the rental frenzy are many. Expats started returning last year after riding out the pandemic elsewhere. At the same time, waves of new immigrants arrived from Hong Kong and mainland China, seeing the city as a stable place to park their money as Washington and Beijing clash over issues like trade and security.
To make things worse, just as foreigners rushed to the tiny island nation—about a quarter the size of Rhode Island, with a population of 5.6 million—there was unprecedented demand from Singaporeans. Construction of new units had stalled during the pandemic, and many locals were offering top-dollar for short-term rentals while they waited for their new homes to be built.
Real-estate agents said the sky-high demand led to fierce bidding wars.
“I was scared to drive because my phone wouldn’t stop ringing,” said Amy Zeng, an agent for Singapore-based ERA Realty Network, about the height of the frenzy last year. She said she was getting five to 10 times as many inquiries as usual, and deals were closing at breakneck speed. People were throwing down massive deposits, sometimes without even seeing the unit.
In the end, Francesca Tanmizi, her husband and their daughter gave up their home of two years.
LAURYN ISHAK FOR THE WALL STREET JOURNAL
With new units coming online this year and some resistance from renters, the market is starting to cool—but only slightly, with rents still far higher than in 2021. On average, a 750-square-foot, two-bedroom apartment in the central district costs about $3,205 a month, according to local property firm 99 Group.
Francesca Tanmizi, a 34-year-old full-time mom from Indonesia, prepared for the worst when she entered lease-renewal negotiations early this year. She loved the 2.5-bedroom unit she shared with her husband and their child for two years, and they’d agreed to keep it if at all possible.
So when the landlord asked them for 60% more, the couple agreed. But their acquiescence seemed to embolden him, and he tried to squeeze them for more. Back and forth they haggled in increments of roughly 1,000 Singapore dollars, equivalent to $750, until Ms. Tanmizi and her husband said they’d had enough.
“Every time we’d counter, he’d just keep going up and up,” she said.
For some, Singapore is simply no longer worth the stress. “I saw one article saying Singapore rent is overtaking places like New York,” said Singaporean Nicole Teo, a 33-year-old accounts manager for an American tech company.
“That’s just crazy,” she said, noting that while Singapore is seen as safe and stable, it is also regarded as a bit boring. “I think Singapore’s pushing its luck.”
Ms. Teo, who lives in the city with her British husband and their toddler, faced a 56% rent increase, and passed. They are considering a move to the U.K.
In real terms, renting generally still costs less in Singapore than in places like New York, though last year the price per square foot in some parts of Singapore narrowly edged out Hong Kong for the first time.
“This real-estate market is, like, on steroids,” said Jenny Li, a 38-year-old chiropractor from the U.S. She opted to move after her landlord raised the rent nearly 60%, but finding a new place was a whole other nightmare. Apartments in her price range were old, small and far from public transit. One appeared to be serving as a storage space for the landlord.
After nearly losing hope, Ms. Li found a place in a northeast suburb that she thought maybe—just maybe—could work. But the landlords, a sweet-looking elderly Singaporean couple, proceeded to play hardball.
Resistance is brewing as property owners keep asking for more—even for units that aren’t very nice, said Noam Nathan, a marketing director for ERA Realty Network. One owner, apparently believing renters were so desperate they’d pay just about anything, asked him to find a tenant for a rundown condo at what he thought was a ludicrous price.
Mr. Nathan turned down the job. “I’m not a magician,” he said.
A housing construction site in Singapore earlier this year.
ROSLAN RAHMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
Corrections & Amplifications
Francesca Tanmizi lived in her apartment for two years. An earlier version of this article incorrectly said she lived there for four years. (Corrected on April 28)
https://www.google.com/amp/s/www.ma...olis-where-rents-rise-60-75-even-100-60ee8f01
