Rental rates for luxury homes in Singapore have outstripped those in Hong Kong for the first time.
This is according to corporate leasing agents Savills.
And it says this is due largely to the short supply of rental units in the prime residential districts amid the recent spate of en bloc sales in Singapore.
Savills also notes that this is pricing some expatriates out of the prime areas.
It is now more expensive to rent a luxury apartment in Singapore than in Hong Kong.
According to corporate leasing agents Savill, a unit in the prime districts of 9, 10 and 11 could cost up to 10 percent more than a similar unit in Hong Kong’s most prestigious locations.
For example, a 3,000 square feet unit at Regency Park can fetch $18,000 per month in rental, more than the $16,500 being asked for a same-size unit in Mid-Levels.
Simon Hill, Regional Director, Corporate Real Estate, Savills, said: “The expats certainly have an obsession in particular with districts 9, 10, and 11. Their social structure is there, their friends, work colleagues, they are close to all the facilities. And there is, if you like, a snob value of being there too.
“We are now urging prospective tenants to consider other areas because the stock is in such short supply. As I often say, particularly to the English expats that are coming out here – ‘you have to consider that 9, 10, 11 is like living in Chelsea or Knightsbridge in London, and would you expect to live in Chelsea or Knightsbridge in London?’. And normally the answer is, ‘no of course not’.”
But increasingly these expatriates – who are mainly mid- to high-level executives of multi-national companies – are looking at units in other areas such as the East Coast and Buona Vista.
And some have even deemed it more economically-prudent to buy the unit, rather than rent.
Savills says the difficulty of finding affordable housing has prompted some MNCs to reconsider locating staff in Singapore.
Simon Hill, Regional Director, Corporate Real Estate, Savills, said: “We’ve had at least three corporates say they are putting on hold the number of people coming into the country until they can work out what’s happening with the housing packages.
“Companies and employees are much, much more portable now, and I think that if the situation continues there will be pressure. For everything that Singapore has to offer, if we can’t find places for people to live, then they will have to go elsewhere, it’s fairly fundamental.”
Overall rental rates for apartments and condominiums in Singapore jumped 8 percent in the first three months of this year.
Source: Channel NewsAsia, 18 May 2007