Singapore’s average home rent has surpassed even Hong Kong’s notoriously costly charges, as owners took advantage of surging demand in a landlords’ market to jack up their asking prices.
Singapore’s average monthly rent in the central region rose 29.7 per cent last year to S$5.77 (US$4.32) per square foot in December, according to the city’s Urban Renewal Authority (URA). Hong Kong’s average rent fell 4.1 per cent last year to HK$33.54 (US$4.27) per sq ft in December, Midland Realty said.
All over Hong Kong, average rental charges are now cheaper in US-dollar terms per sq ft than in Lion City, according to a comparison of prices across three major locations in both cities compiled by South China Morning Post. Tseung Kwan O in Kowloon, the Mid-Levels on Hong Kong Island, and even Yuen Long in the New Territories are now cheaper than comparable areas in Singapore, the data showed.
Singapore’s soaring housing cost has diluted the Lion City’s competitive advantage in attracting expatriate talent, as it vies with Hong Kong for global talent in the quest to be Asia’s financial hub.
Before the Covid-induced slump in Hong Kong’s housing market, the city ranked as the least affordable urban centre on Earth several year’s running, retaining the dubious honour as recently as June 2022.
Rental charges fell with the exodus of people – both expatriates and local residents – as three years of harsh anti-pandemic measures combined with six months of street protests to drive the city’s economy into recession. Average home rent declined by 12.5 per cent since July 2019, according to Midland.
Singapore’s political stability and widely praised management of the pandemic allowed the city to shine, making it a more attractive base for multinational companies. A number of companies like the French bank Societe Generale even temporarily relocated their staff to Singapore to avoid Hong Kong’s 21-day quarantine at the height of the pandemic.
Population shifts have spilled over into the rental market. At the Mid-Levels, a popular residential enclave for expatriates on Hong Kong Island, average rent fell to US$5.60 per sq ft, less than the US$6.09 in Singapore’s District 10.
At Tseung Kwan O in Kowloon, the average rent declined to US$4.94 per sq ft, much less than the US$6.64 asked for at Singapore’s District 11. The same gap exists even in Yuen Long, where the average monthly charge to rent at Yoho Midtown was US$4.46 per sq ft, cheaper than the US$6.01 per sq ft at J Gateway in District 22.
Still, the Singapore market will not see a repeat of last year’s skyrocketing rents, said Low of PropNex. Alan Cheong, Executive Director of research and consultancy at Savills in Singapore, agreed, saying rents will increase by 5 to 10 per cent.
About 18,000 new private flats are expected to hit the market this year, which “could swing the pendulum towards a tenant market,” said Cheong. However, he added that any correction is unlikely to erase all of the gains. Meanwhile, given that Hong Kong has scrapped its anti-pandemic measures, the city’s rents may rebound this year.
