Expats in Singapore make plans to leave amid skyrocketing rents, competition for talent

The_King · March 27, 2023

Though he and his family “love living in Singapore” and have been doing so for the last seven years, French expat Paul will be moving his whole family back to France come June as his landlord intends to raise the rent by 70 per cent.

“The rent increase is S$4,000 (US$3,000) per month. That’s money that we cannot save, use for holidays, or set aside for retirement preparation,” said Paul, who is in his late 40s and holds a director-level job in fintech, but declined to give his full name.

The impact of rising rents on Singapore’s expat community gained attention recently when a TikTok video by a British woman about the topic made headlines.

The woman who goes by the handle @salshoult had sarcastically described how her “generous” landlord intended to raise the rent by 75 per cent and called it an “excellent deal”, as he would otherwise put the property on the market at a 100 per cent mark-up.

This comes as rents for private housing last year shot up at the fastest rate in 15 years, outpacing some cities.

“While rents rose by around 18 per cent in the year to September 2022 in Singapore, they fell in Hong Kong and Shanghai, were flat in Kuala Lumpur while Beijing saw modest rises,” said Steven Kilfedder, head of production at ECA International, a data, software and consultancy firm.

Akshay Rathi, a senior analyst at the Economist Intelligence Unit said: “Singapore witnessed an above average increase in [rents] over the past year, and ranked in the top quarter in terms of rental inflation for the 173 cities assessed.”

According to the unit’s latest annual World Cost of Living Report, Singapore ranks number one together with New York as the most expensive city.

Private homes in the River Valley/Orchard area of Singapore. Expats are starting to look for cheaper places to live in the city state, according to one recruitment firm. Photo: Bloomberg

Paul and the TikTok user were not alone in their experience, with three out of five expats interviewed for this article saying they were contemplating or planning to leave Singapore due to skyrocketing rents, adding that many in their community intend to do the same. Every Friday

“With inflation on top of 70 per cent rent increase – anyone who can leave is leaving Singapore,” Paul said.

Industry players such as international recruitment firms and movers acknowledged seeing some departures, though they did not come to a consensus on the extent of the trend.

And while Singapore largely remains attractive to global companies and talent, experts cautioned that continuously elevated rents may gradually chip away at this attractiveness given heightened international competition.

This may cause the nation to lose out on global talent, starting with people who are particularly sensitive to costs.

Like Paul, a British citizen who gave his name as John S is also facing a 70 per cent rent increase when his lease is due for renewal in a few months. He has not decided on his next step.

The 50-year-old who has lived in Singapore for 12 years with his family of four and holds a sales director position for the Asia-Pacific region, said they were contemplating moving from the city state’s east coast to the heartlands or even public flats.

Given his job role, John said another possible option was for him to be based in nearby cities.

The expat contracts of 20 years ago don’t exist any more … most of us are here on local contracts, paying our own rents, healthcare, schooling for kids, flights and so on John S, British expat in Singapore

Explaining further on how rising costs impact expats, he said that contrary to common belief, “the expat contracts of 20 years ago don’t exist any more”.

“Most of us are here on local contracts, paying our own rents, healthcare, schooling for kids, flights and so on,” he said.

This is worsened by the fact that foreigners do not enjoy subsidies like locals, while at the same time some expat families have become single income as a recent legislation change disallowed dependent pass holders from working, he said.

But some expats are staying put.

Pupils leave their school after class in Singapore. Expats with children say they feel particularly squeezed by skyrocketing rents in the city state. Photo Xinhua

Alexis Tran, 30, a French national who has been working in Singapore for more than three years, said that his company’s pay package covers accommodation.

“Also I don’t have any family or kid to support, the cost of living is different compared to other expats who need to provide school fees or bigger places for their family,” said the senior software engineer in the fintech industry.

Some industry players are observing expats leaving Singapore and some dip in interest among international talent arriving.

Recruitment and human resources professional Joshua Yim said that based on feedback he gathered from his clients and network, expats leaving Singapore due to escalating rents is a “growing concern”. The chief executive officer of recruitment firm Achieve Group estimated the prevalence of expats leaving to be “maybe two to three out of 10”.

Adam Bukauskas, co-founder of Wise Move, an online platform for movers that also handles international moving services, said that the company has noticed a decline in enquiries for services to relocate to Singapore.

“Inquiries for ‘international movers’ and ‘relocation companies’ that reached Wise Move Singapore over the last six to 12 months are down about 20 per cent if compared to pre-pandemic levels,” he said.

On the other hand, Ivan Ong, deputy general manager of The Family Movers, said the firm had seen an 18.5 per cent rise in numbers of incoming relocations in the first three months of this year compared to the same period last year.

“For the same period, we see a 7 per cent drop in terms of outgoing relocations,” he said, though he acknowledged that “there is certainly a group of expats” moving out to places that offer lower costs of living, such as Bali.

Expats have a choice and they have mostly chosen to change their lifestyle. For example, to no longer live in expensive areas Richard Bradshaw, Ethos BeathChapman Asia recruitment

Richard Bradshaw, managing director of recruitment firm Ethos BeathChapman Asia, said his company has not seen cases of expats leaving Singapore, or a decline in interest in arrivals.

“Yes, home rental prices in Singapore have gone up, but rental prices in other countries have not dropped either,” he said.

“Expats have a choice and they have mostly chosen to change their lifestyle. For example, to no longer live in expensive areas such as Orchard or River Valley.”

John Doyle, associate partner of recruitment firm Page Executive, said that rents would affect expats differently, depending on their circumstances.

For instance, someone at a mid-management level who has a family will find it difficult to cover their cost of living with rents increasing anywhere between 20 per cent and 70 per cent.

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Meanwhile, top executives are shifting their focus in offer negotiations, where now instead of larger equity or employee share-option components, they prefer to see more in base salary.

Some are even asking for housing allowances to make the move, Doyle said.

He added that while the firm is seeing a reduction in middle-level expats in Singapore, he attributed it in part to companies generally making “a very conscious effort to prioritise local hires”.

Overall stability and safety, ease of conducting business, attractive tax rates and good infrastructure were among the factors making Singapore a good place to work, expats and industry experts said.

Like other industry players, Doyle said he believes Singapore generally remains an attractive location for expats for now.

“However, if the cost of living and rental price hikes continue, fatigue may set in,” he said, noting how other cities are seeing “an uptick in interest”.

“Hong Kong is focused on attracting people back and Dubai has seen a huge influx of people and companies setting up hubs there,” he added.

Bukauskas cited the example of how in the United States, some technology companies have moved out of San Francisco, where costs have kept on rising, to other states like Texas to lower costs.

“There is no reason people will not behave the same in Singapore. They will move out or won’t come if costs keep on rising,” he said.

Yim said he has seen some multinational companies with their regional headquarters in Singapore have their workers working remotely in nearby cities where overall costs are lower, and fly them in when necessary.

“If prices keep going up, companies will be left with two options – either adjust their packages accordingly, or let their employees move elsewhere and work remotely,” Yim said.

Shyla Anne Matthews, founder and managing director of moving company SIR Move, said young global talent “in any industry” will struggle to afford the increases in rents and cost of living, and Singapore “might lose out in having a good mix and balance” of talent.

https://www.scmp.com/news/asia/southeast-asia/article/3214937/expats-singapore-make-plans-leave-amid-skyrocketing-rents-competition-talent