SINGAPORE is now the fifth most expensive location in the world for expatriate accommodation, based on rents for two-bedroom apartments that are commonly preferred by expats.
After sinking 17 per cent in 2009 as the recession and fresh supply hit prices, monthly rentals for unfurnished two-bedroom properties here have rebounded by 15 per cent to US$2,810 in 2010, says ECA International's latest report.
The firm, which provides data and solutions to global human resources departments, said yesterday that this pushed Singapore one spot higher to rank as the fifth most expensive on the global rankings, and two spots higher to rank third in Asia.
'The rebound in Singapore has been driven by a general recovery in house prices along with increased demand,' said Lee Quane, regional director of ECA Asia. 'Assignee numbers are up again in Singapore following falls during the economic downturn. This has placed pressure on rental accommodation, particularly in areas popular with expatriates,' he added.
Tokyo ranked the most expensive globally. In Asia, it was followed by Hong Kong - frequently seen as Singapore's key competitor for expatriate talent - which shot up six spots to become the third most expensive place for this form of accommodation globally.
Two-bedroom accommodation rentals there soared 22 per cent - reversing from a 25 per cent plunge in 2009 - to hit an average monthly rent of US$2,830.
'Land in Hong Kong is already expensive due to the lack of space,' said Mr Quane, adding that low interest rates, high liquidity in the market and a shortage of residential supply have pushed rents up further.
ECA, which compiles global rental costs to help managers decide on housing arrangements or allowances for employees sent abroad, said that rentals in Asia rose a sharp 7 per cent, in contrast to the one per cent drop globally.
Apart from the region's robust economic growth, currency appreciation played a role too, said Mr Quane, citing the Singapore dollar's strengthening against the greenback.
'When Singapore rents are quoted in local currency they increased at the lower, albeit significant, rate of 9 per cent year on year,' he said.