Wednesday, January 30, 2013

Expat housing here 2.7% pricier this year


Average cost of relocating staff to Singapore has increased to US$5,510 per month - 3rd highest in Asia

The Straits Times
January 30, 2013

THE average cost of relocating staff to Singapore has increased 2.7 per cent to average US$5,510 per month this year - third highest in Asia and eighth globally.

Taking currency fluctuation into account, however, the cost of renting an apartment in Singapore in US dollars has fallen slightly, said Lee Quane, regional director, ECA International, Asia.

"(In US dollars), we actually observe a small decrease in rental price. This contrasts strongly with a year ago when the US dollar was a lot weaker against the Singapore dollar," said Mr Quane, noting that in 2011, rents increased more than 15 per cent once converted into the greenback.

According to data from the human resources consultancy - which uses rental prices of three-bedroom apartments in areas commonly inhabited by expatriates as the benchmark comparison - rents for an unfurnished three-bedroom apartment in Districts 9-11 and East Coast average US$5,510 per month, 50 per cent higher than the regional average.

Companies are managing the increase in costs by expanding the locations in which they expect employees to reside, and scaling back on accommodation packages for certain employees, said Mr Quane.

"Ten years ago, we'd primarily be focusing on Districts 9,10,11 because that's where about 80-90 per cent of international assignees lived. However, as accommodation costs have increased, companies have not necessarily increased their housing budget in line with rental values."

So employees who want to continue to enjoy the same standard of accommodations have had to look outside of the core central region, to East Coast and even Woodlands, he said.

Looking ahead, Mr Quane said he does not expect rents to increase more than 5 per cent this year.

"Companies have not been moving staff into Singapore at the high rates we saw previously. So that's going to have an impact in terms of demand . . . (And while) we're not seeing Singapore catch up with Hong Kong in terms of accommodation costs, accommodation costs in Singapore are much higher than they were a few years ago. So several of the cost advantages that companies had relocating staff here have disappeared."

The average cost of renting a three-bedroom apartment in Asia rose one per cent year-on-year to US$3,640 per month. This figure is 20 per cent higher than the global average of US$3,030 per month, which slipped one per cent year-on-year.

Within Asia, the biggest rental price increases in the region were witnessed in mainland China; the most pronounced increase was seen in Beijing, ranked 19th globally (up from 26th last year) following a year-on-year increase of over 12 per cent.

Rents for a three-bedroom apartment in Hong Kong, the most expensive location in the world, averaged US$11,550 per month, despite a 2-3 per cent correction.


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