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Thread: Hefty rents force expats here to downgrade or buy

  1. #1
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    Default Hefty rents force expats here to downgrade or buy

    May 28, 2007

    Hefty rents force expats here to downgrade or buy

    Some landlords want hikes of 100% or more to renew leases

    By Joyce Teo, Property Correspondent



    CYCLING AFTER A NEW SUNSET: Neighbourhood centres like Sunset Way are taking on new life as more foreigners forsake expat enclaves like Holland Village in search of cheaper homes. -- MALCOLM MCLEOD


    RENTS of private homes are rising so fast that some expatriates are being forced out of prime areas, sometimes into HDB flats, while others are choosing to buy instead.

    Expats have been complaining about soaring rents since late last year, with some facing rises of 50 to 100 per cent or more when their leases come up for renewal.

    'I entered this (business) at the end of 1993 and I have never seen such huge rental increases,' said leasing agent Raymond Han.

    Savills Singapore's director of corporate real estate, Mr Simon Hill, said most of his firm's recent deals in districts 9, 10 and 11 were at significantly higher rental levels.

    'Certainly, there were no deals done at below a 50 per cent rise in rent,' said Mr Hill.

    An Australian who faced a 66 per cent rent hike for his 1,250 sq ft apartment in Newton recently moved into a HDB flat, preferring that to a condo unit in poor condition.

    He now pays $1,500 for a five-room flat in Ang Mo Kio, well under the $1,800 he was paying on his old lease.

    'There is a perception that expats come here on huge salary packages,' said the expat, who is a teacher. 'Many are lower-rank professionals like me. So this rental issue just doesn't come down to a need to revise salary packages.'

    He said his colleagues are also reporting exorbitant rent increases.

    'But our rental assistance has increased by only $100 or $200 a month,' he added.

    Official data shows that rents of non-landed homes rose by 8.1 per cent in the first quarter this year, up from a 5.3 per cent rise in the last three months of 2006.

    Overall, residential rents remain about 29 per cent below the 1996 peak. But market watchers say the data reflects the situation in the whole market, not just recent renewals or deals in coveted condos and prime areas.

    Asking rents at Ardmore Park in the Orchard Road area, for instance, have shot up to between $17,000 and $18,000, from $14,000 to $15,000 a year or two ago.

    But some tenants with ongoing leases at the posh estate could still be paying as little as $12,000 a month.

    'I would say the huge increases started only in January,' said Mr Han.

    He is helping an Australian banker find another home, after the expat's landlord demanded $6,500 a month more for his four-bedroom bungalow in Bukit Timah. That would have meant a monthly rent of $18,000.

    The hefty rises have also prompted some frustrated expats to buy instead of rent, said property agents.

    Housewife Cara Killham and her husband, a teacher, chose to buy after rental demands for their Clementi condo became too extreme.

    'The rise in rentals got us looking for a place. That was the tipping point,' said Ms Killham, a British citizen who came here eight years ago.

    The couple recently decided on a unit of about 1,600 sq ft in Dairy Farm Estate on Dairy Farm Road.

    'Our mortgage and condo fees would still be less than the monthly rent,' she said.

    Mr Hill of Savills Singapore told The Straits Times: 'What we are seeing is a massive resistance building against the rental increase.

    'Either companies won't bring in so many expats, or expats will move out of districts 9, 10 and 11.'

    Yet, there are still expats, mostly those new to Singapore, willing to take up the new rental offers, agents said.

    Apart from strong demand, rents have also risen as a result of tight supply caused by the many collective sales.

    It means a double whammy for companies, as rents for quality office space have risen sharply as well.

    'Finding a new place is very difficult,' said an expat in the technology sector. 'We have made a number of offers and had cheques cashed, only to be told that the landlords had changed their minds.'

    'It has been very stressful, and has forced us to reconsider our future in Singapore.'

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    Default Re: Hefty rents force expats here to downgrade or buy

    May 28, 2007

    Double whammy for companies


    FOREIGN companies are feeling the pinch at both ends because of the property boom.

    On the one hand, they have to pay more for office space, especially in prime areas like Shenton Way. On the other, they might have a hard time bringing in expat employees because home rentals have also shot up.

    Costs will burgeon if the firms provide more rental assistance, while those employees entitled to only limited aid will have to decide if remaining in Singapore is viable.

    Some expats have chosen to downgrade to HDB flats for now, but others might just call it quits and seek less pricey pastures.

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    Default Re: Hefty rents force expats here to downgrade or buy

    Quote Originally Posted by mr funny
    May 28, 2007

    Double whammy for companies


    FOREIGN companies are feeling the pinch at both ends because of the property boom.

    On the one hand, they have to pay more for office space, especially in prime areas like Shenton Way. On the other, they might have a hard time bringing in expat employees because home rentals have also shot up.

    Costs will burgeon if the firms provide more rental assistance, while those employees entitled to only limited aid will have to decide if remaining in Singapore is viable.

    Some expats have chosen to downgrade to HDB flats for now, but others might just call it quits and seek less pricey pastures.
    It happens before. When all the hype and panic subside, many of the owners will find out there is no takers for thier condos at prime locations and start cutting asking prices. I think both rental and sale markets are over-shot the reality and be ver careful if you want to take buy any property at this chaotic times.

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    Default Re: Hefty rents force expats here to downgrade or buy

    Quote Originally Posted by Unregistered
    It happens before. When all the hype and panic subside, many of the owners will find out there is no takers for thier condos at prime locations and start cutting asking prices. I think both rental and sale markets are over-shot the reality and be ver careful if you want to take buy any property at this chaotic times.

    The rental prices may have went up but there are takers. Just check with the agents and you will know. It is just that the less wealthy expatriates still want to stay in the places where the more wealthy expatriates are staying.

    These less wealthy expatriates should rent a suburb condo or HDB flats. Are you sure if they go to another place, they can stay in a better place than their current ones?

    Where will this place be? HCMC? Hong Kong? Sydney? Tokyo? NYC? London? These places are more expensive than Singapore. They will be worse off.

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    Default Re: Hefty rents force expats here to downgrade or buy

    Quote Originally Posted by Observer.
    The rental prices may have went up but there are takers. Just check with the agents and you will know. It is just that the less wealthy expatriates still want to stay in the places where the more wealthy expatriates are staying.

    These less wealthy expatriates should rent a suburb condo or HDB flats. Are you sure if they go to another place, they can stay in a better place than their current ones?

    Where will this place be? HCMC? Hong Kong? Sydney? Tokyo? NYC? London? These places are more expensive than Singapore. They will be worse off.
    Many of the agents I talked to told me that they had never worked so hard in their life, but many of them don't really make a lot of money than before. As property market "hot-up", viewing property becomes a favourite pass-time for many: unemployed who have so much time on their hands, house-wife, owners of property to just like to feel good week after week after hearing the ever increasing "asking prices", and of course, serious buyers. But, the point is everywhere are flooded with peoples and only tranactiosn that can go thru are those asking for realistic prices from the owners, but those are the exception rather than norm these days. Agents are like tour agents these days and have to condcut several sessions of viewing during the day (esp. Saturday and Sundays) for just one property. The problem is unlike real tour guides, you don't collect any tips after the tour.

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    Default Re: Hefty rents force expats here to downgrade or buy

    Quote Originally Posted by Unregistered
    Many of the agents I talked to told me that they had never worked so hard in their life, but many of them don't really make a lot of money than before. As property market "hot-up", viewing property becomes a favourite pass-time for many: unemployed who have so much time on their hands, house-wife, owners of property to just like to feel good week after week after hearing the ever increasing "asking prices", and of course, serious buyers. But, the point is everywhere are flooded with peoples and only tranactiosn that can go thru are those asking for realistic prices from the owners, but those are the exception rather than norm these days. Agents are like tour agents these days and have to condcut several sessions of viewing during the day (esp. Saturday and Sundays) for just one property. The problem is unlike real tour guides, you don't collect any tips after the tour.
    well, agents are making heaps of $$ though. some are literally laughing to the bank. conversely, the earnings of a tour guide cannot get anywhere close.

  7. #7
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    Default Soaring Rents Squeeze Expats Out Of Prime Districts

    Some have been forced to downgrade or buy
    May 28, 2007
    AsiaOne

    Rents for private homes are rising so fast that some expatriates are facing hikes of 50 to 100% or more when their leases are up for renewal.

    Many have been forced to rent homes outside of prime districts as well as in HDB estates. Others are finding it cheaper to buy then to rent.

    Official data shows that rents of non-landed homes rose by 8.1% in the first quarter of this year, up from a 5.3% rise in the fourth quarter of last year. Overall, residential rents are still about 29% below the 1996 peak. But market watchers say the figure reflects the situation in the whole market and not just recent renewals or prime district deals.

    For example, asking rents at Ardmore Park in the Orchard Road area have shot up to between $17,000 and $18,000. The price range about two years ago was $ 14,000 to $15,000.

    The huge increases, fuelled by strong demand and a tight supply resulting from the many collective sales, started only in January, say property agents.

    Foreign companies are also in a bind. Apart from higher rentals for office space, they may find it harder to recruit or keep expat workers. Costs will rise if they increase housing allowances, but expats may leave if companies do not.

    The Straits Times today reported that an Australian who faced a 66% hike for his 1,250 sq ft apartment in Newton recently moved into an HDB flat, preferring that to a condo unit in poor condition. He now pays $1,500 for a five-room flat in Ang Mo Kio.

    Despite this, some are having problems finding a flat due to picky landlords.

    One expatriate said that when he goes to view a flat, there would be at least 10 other expats looking at the same unit at the same time.

    The situation has prompted Cara Killham and her husband, a British teacher, who came here eight years ago, to buy their own place after the rent for their Clementi condo became too extreme. The couple recently bought a 1,600 sq ft unit in Diary Farm Estate, off Upper Bukit Timah Road.

    The soaring property prices have also made it difficult for buyers as many proper sellers keep changing their minds as they hold out for more cash.

    The New Paper today gave an example of an IT consultant who tried to buy a condo unit but was unable to clinch the deal because the owner changed his mind and upped the asking price.

    Ryan Lim wanted to rent a unit in a condominium in the east and agreed on the amount set by the owner. But the owner changed his mind and wanted to sell it instead for $430,000.

    Mr Lim and his wife agreed but the owner changed his mind and decided not to sell after all.

    The couple then found a 1,500 sq ft unit in the same development and was willing to match the asking price of $550,000, but the owner upped the price to $570,00. A similar-sized unit was sold for $485,000 last month, said The New Paper.

    He has given up on the second property and is now in discussions over a third one in the same estate.

    Said an exasperated Mr Lim: "It is really frustrating looking for a place now. It seems like the sellers are either not sincere about letting go of their place or they're just plain greedy."

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