Expats won’t rescue Singapore’s struggling property market

Homes are unaffordable even for foreigners.

Homeowners can’t rely on expatriate tenants to boost rents this year, according to a report by PropertyGuru.

The report noted that islandwide home rents are expected to drop by 3-5% in 2016, as firms slash housing allowances and expats grapple with higher living costs.
Moreover, within the existing pool of renters, there are also concerns of affordability of rents.

The report cited a recent survey conducted by HSBC, which noted that an average expat at the managerial level draws roughly $ 5,600 – 6,300 per month. 

Meanwhile, average residential rents in the RCR for 2015 was $ 4,720, highlighting the disparity between incomes and the cost of housing, forcing expats to look for cheaper housing alternatives in the market. 

“The exorbitant cost might make some companies think twice about sending their staff to Singapore because of the weakening global economy. They many hence choose to revise housing allowances down or to offer localisation packages, which replaces the expat’s compensation package with a comparable one on par with local Singaporeans. This will eventually affect how much expatriates can fork out for rents,” PropertyGuru said.