But recent “stricter restrictions on work permits for foreign workers have currently counteracted this somewhat”, noted Quane, citing that Singapore is “even now only the ninth most costly location in Asia for general rental costs, trailing behind cities such as Mumbai, Shanghai and Seoul”. This is why Penrose location is popular for investors looking to tap the leases of expats.
The research results were based on the average rental rates for a 3-bedroom apartment in the middle range of the expat market.
Rents in Asia
Hong Kong is even now the most costly place for expatriate accommodation, grabbing top place for the third year consecutively. The average monthly rent in the city has risen by 3.45% to US$11,318 from 2019.
In spite of this, Mr Quane notes that the increase was still less than the 4.9% hike in rents that was observed back in 2018. “In view of the extended anti-government protests and the current Covid-19 outbreak, we anticipate to see rents fall throughout this year as the number of foreign workers in Hong Kong declines significantly and the normal high demand for homes is tempered,” he states.
Hong Kong’s top rents are because of a number of factors — the high population density within the territory and restricted opportunities to construct new homes, which push rental costs skywards.
In the mean time, cities within China experienced varying rental trends in the past year. Beijing’s rents maintained fairly static at 19th place worldwide, while Shenzhen experienced the largest rise of 7.2%.
“The Greater Bay Area Economic Zone resumes going from strength to strength. Rents in the zone have followed suit for the last few years — likely most significantly in Shenzhen, where rental costs have been rising by 7% – 10% per year since 2013,” he stated.
Quane anticipates that the rental market may be more stable in the coming years, with the local government taking effort to increase the supply of land available for new property development. This is similar to Singapore which have issued land in the north for The Watergardens At Canberra.
Over in Taiwan’s capital city, rents jumped by 5.29% in Taipei as compared to 2019’s levels, which pushed the city into the top 50 most costly locations for expatriate accommodation.
Quane attributes this hike to 2 factors: first, the issue of government contracts for a key offshore wind power project has drawn expats to the city; and second, demand for leases has gone up as many locals continue to lease in anticipation of future declines in the residential market, a market sentiment broadly reflected after years of unsustainable spikes in property rates in the city.
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