Rent prices in the Orchard Road area have been particularly hard hit.
Even though more foreigners are coming to Singapore to work, rents of residential properties continue to fall further, reported CNBC.
Based on data from the Ministry of Manpower (MOM), the number of overseas workers in the country, excluding domestic helpers, rose by more than 22,000 in 2015 on an annual basis. But this is still a far cry from the 149,000 added in 2008 before more stringent rules on foreign manpower took effect.
However, the government’s rental index has reported a decline of roughly 10 percent since 2013, while landlords, especially those leasing out high-end homes, have seen bigger rental drops.
For example, Panache Management’s Chief Executive, Alexander Karolik Shlaen, reduced the monthly rent for his unit to below $8,000, down 40 percent from $13,000 in 2008.
At the Four Seasons Park condominium in District 10, the monthly rent for a 2,200 to 2,300 sq ft unit was slashed to $7,800 compared to $10,000 between 2013 and 2015.
According to experts, one reason why rents are still falling despite the continued influx of foreign workers is that the new wave of expatriates earn less than previous groups.
These new workers could mainly be ‘S Pass’ holders rather than employment pass holders. The former earn at least $2,200 per month, while the latter have a minimum monthly salary of $3,300, said Satish Bakhda, COO of Rikvin Singapore, which helps firms apply for work permits for foreigners.
In addition, fewer foreigners from the well-paid financial industry are coming to Singapore, noted Kelly Tang Robinson, an agent with Land Vista Property Network.
“There’s almost like zero relocation here (among bankers),” she said. Although there are still some who are searching for accommodation, many are leaving the country.
Furthermore, financial institutions here now prefer to hire Singaporeans. “With the banking economy not doing so well, it’s better to use locals as they have to pay more for foreigners,” said Bakhda, adding that more workers from the oil sector are also leaving amidst a slump in crude prices.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
