Looking to move house or rent in Singapore and wondering why, oh why are condo rentals and HDBs so expensive right now?
Are you frantically looking for a family-friendly condo but finding that the rental prices have jumped? We chat with Nadia Ederer, fellow mama and realtor, to find out why the rental prices in Singapore are so cray-cray right now, plus don’t miss her tips on how to navigate the rental market in 2022.
Realtors here in Singapore have repeatedly been asked why rent has shot up over the last several years. Specifically, rent in Singapore has skyrocketed during the Covid-19 pandemic. Condo rents rose 2.3 per cent in April 2022 after gaining for 16 months straight, while year on year, rents were up 15.1 per cent compared to April 2021, according to flash figures from SRX Property. Rents for HDB flats also increased for a 22nd consecutive month (14.3 per cent higher year-on-year)
Due to travel restrictions and lockdowns, many expats have vacated their housing and left Singapore. The population of Singapore has decreased by about 18,000 residents since the start of the pandemic. So, it would seem like housing demands and prices should be low, but that is not the case and everyone is asking why.
There are actually other factors at play. Changes in supply and demand among local Singaporeans are actually the strongest driving factors. Here. I’ll tackle why rental prices are up, what the 2022 outlook for the rental market might look like in Singapore, and tips on how families can navigate the current market.
Why were rental prices so high in Singapore last year?
1. Housing project delays
The pandemic had a large impact on migrant workers who work in construction – not only because of the spread of Covid-19 amongst this group, but also because of restrictions in them coming in and out of Singapore. Workers were unable to come to work, projects were put on hold, and supply chains were interrupted. These factors caused massive delays in housing projects that were meant to house Singaporeans.
For Singaporeans who had made long-term plans (often up to 3-years in advance!) to move to places like newly built HDB flats (also called Built-To-Order or BTO flats), these housing delays have left them without a place to move in to. Therefore, more are looking to the rental market for housing so that they can continue with their life plans, such as getting married and starting a family.
2. Young adults left multi-generational homes for their own space
Another factor driving prices up is work from home and home-based learning situations. In Singapore, many young adults live with their parents in multi-generational homes. But work from home and home-based learning has caused many multi-generational homes to feel very crowded (and sometimes unprofessional). Therefore, rental demand increased when young professionals decided they needed their own space.
3. The resale market is on the rise
Since the housing market was on the rise, many people took advantage of the time to sell their HDB homes and upgrade to a condo. While many people are selling their homes, they’re not quite ready to purchase their new condo yet, so they rent in the meantime. This causes a domino effect that drives rental prices up.
Read more: Singapore Condo Reviews: Real Talk on Pros, Cons, Facilities, Location and Family Friendliness
4. More expats entering Singapore
Now that travel measures are more relaxed, more professional & skilled workers (predominantly from Hong Kong) are entering Singapore driving demand and prices of rental homes up.
5. Malaysians working in Singapore no longer want to commute
After 2 years getting used the the convenience of living and working here, many Malaysians who used to commute daily across the causeway have decided to continue to stay in Singapore instead. So their rental homes are not released back into the market to add to the current supply.
Will rent prices settle down in 2022?
We all want the answer to be, “yes!” but delays and restrictions won’t go away overnight. In fact property rentals hit their highest levels in April 2022, surpassing their last peaks in 2013, with rents expected to keep rising as Singapore reopens and foreigners return to work here. Instead, 2022 is probably going to be a catch-up year. The construction market is picking up, but it is still going to be slower than in previous years. Buyers don’t want to take the risk on construction, so demand will continue to be high for resale and rental units.
Also, as borders re-open, demand and pricing for housing will continue to be high.
How do we navigate the rental market in 2022?
Given that many things are out of our control in the rental market, what can we do? Unfortunately, we just have to accept the current situation. But it is important to stay educated about the market trends and plan in advance knowing that prices are going to be high. Many buyers are still holding out to find the golden nugget property, but that is very rare.
1. Keep your budget realistic
Right now, the priority is finding a place within your budget. It’s not about manipulating pricing. Rental prices are hard to negotiate right now. The maximum negotiations realtors are seeing is maybe 5–8%, if at all. If you try to play games with price, it is likely you’ll lose the place to someone who is willing to pay more. So, keep your search realistic, make offers at asking, and don’t waste your time looking at options that are over budget.
2. Expand your search
If you’re not able to find exactly what you want at the price you want it, then consider moving away from popular areas (Core and Rest of Central Region) and move more into the “OCR” (Outside Central Region) areas. It will seem inconvenient at first to live “so far away” from school or work, but if you like, you can consider this a temporary move till the rental market cools down in the next couple of years. This might not be practical for everyone, but everything is within reach in Singapore and there are lots of great places to live outside of trendy areas.
3. Find representation
Have an agent represent you to help with your housing search. Find someone you know, like, and trust who can facilitate the process and advise you accordingly. Landlords are represented by agents, so you, as a tenant, have every right to be represented too.
4. Speak to your landlord
Finally, if you’re unable to move but cannot bear the high rental prices, talk to your landlord. See if you can get an extension on your lease with an exit clause. A 3-month exit clause will allow you to stay in your current place while you search for new housing options, and you can exit the lease early if you find something you like.