Data from URA showed that rents have increased by 1.4% last year, while the number of leases inked rose to a decade-high 93,920 units.
Singapore saw residential rents hit a three-year high in 2019, on the back of strong expatriate demand.
Using Urban Redevelopment Authority (URA) data, real estate agency OrangeTee & Tie noted that rents increased 1.4% last year, while the number of leases inked rose to a decade-high 93,920 units.
Rental apartment demand in the city-state mostly comes from expats, who find it cheaper to rent than purchasing a unit outright due to hefty stamp duties imposed on foreigners.
“Some expats could be here for short-term work assignments, therefore leasing will be a more logical and flexible choice,” said Christine Sun, Head of Research and Consultancy at OrangeTee & Tie.
Majority of Singaporeans, on the other hand, live in public housing and consider renting as cost-inefficient given the high property prices, reported Bloomberg.
Singapore attracts high-skilled expats as it continues to invest in sectors like health and fintech. Foreigners find the city-state appealing due to its efficient infrastructure, political stability, low crime, high education standards and green spaces.
Moreover, rents in Singapore are cheaper compared to Hong Kong and New York. In fact, a Deutsche Bank report last year listed Hong Kong as the most expensive place to rent, with San Francisco and New York following in second and third place, respectively. Singapore inched one spot to 11th.
Looking ahead, analysts expect rents to further increase between 3% and 5% this year even as Singapore braces for fallout from the COVID-19 outbreak.
“The strong influx of overseas workers in the new economy and companies seeking to de-risk from single country concentration should spur rents in 2020,” said Savills Executive Director of Research Alan Cheong.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com