Source: The Straits Times, 19 June 2007
Fast-rising housing costs have pushed Singapore three places up to 14th spot in an annual global survey of the cost of living for expatriate workers.
This places the Republic’s cost of living for expats over that of New York, Beijing and Istanbul in the survey of global cities.
Moscow is the most expensive city for expats for the second straight year, ahead of London and the Asian trio of Seoul, Tokyo and Hong Kong.
The survey - which covers 143 cities and measures the cost of 200 items in each location, including transport, food and entertainment - is used to help multinational firms determine compensation allowances for their expatriate staff.
The rise in Singapore’s ranking has prompted concerns among human resource consultants that the cost of hiring expats here is higher.
But the survey, conducted by Mercer Human Resource, also found that despite recent hikes, rents in Singapore are still relatively low.
Mercer figures showed that the rent of an upmarket two- bedroom unfurnished apartment costs US$2,946 a month here (S$4,530), compared with US$7,038 in Hong Kong and US$3,485 in Shanghai.
According to Mr David Leong, managing director of recruitment firm People Worldwide Consulting, the overall cost of living here is still comparably low given Singapore’s infrastructural efficiency and social stability.
Mercer said the ’sharp increases in house prices’ and the knock-on effect on rentals was the main reason for the jump.
Indeed, human resource consultants said expats here have been badly hit after rentals here rose 25 per cent to 35 per cent in the last 12 months.
Mercer Human Resource Consulting director Mr Fermin Diez said some of his multinational clients are concerned that the rise in housing costs will affect bottom-lines.
Rental cost is about 25 per cent of the total cost of an expat. So with rental costs going up by 25 per cent to 35 per cent, the total cost of an expat can rise 4 per cent to 9 per cent, Mr Diez said.
He cited an example of a firm with 120 expats here whose overall cost rose by over $1 million.
Some companies have offered to cover their expats’ rent rises, Mr Diez said, and more firms will do so in the coming months as their expats renew their rental contracts.
But expats on local packages may experience a difficult time if there is a need to downgrade to lower rental properties, said Ms Rosa Goh, country manager of Manpower Singapore.
Australian Matthew Shaw, a business consultant who has worked here for six years, said housing allowances have not kept pace with rentals.
He said one of his associates had her housing allowance upped from $3,500 to $4,000 and had to pay $500 out of her own pocket after her landlord raised the rent to $4,500 a month.
I am a teacher at an international school here in Singapore. My rent allowance currently covers 95% of my rent of 1800 in a good condo. However when my lease expires at the end of July 2008 I have been told by one agent that the rent will then rise to 3,800. That is a hike of more 100% (and that does not even include a much needed refurbishment).
ReplyDeleteI know that expat families are having a hard enough time getting their children into international schools as demand exceeds places. Word is already getting around in education chatrooms that Singapore is pricing itself out of the market for middle income workers. It is not as if my job can be done by a local person. International schools need international teachers. Why is there no limit on the amount by which rents can rise?
I must say that while Singapore is a great place to live I have been truly shocked by the unfettered greed of landlords/agents. While these rises are no doubt driven by the market, there seems to little talk or understanding of the fact that many expats are not on fat company packages.
I have seen reference, quite rightly to helping the 'poor' with their housing but Singapore is not a city of just rich and poor, there are plenty in between and those of us who are expats will surely have no choice but to look for work elsewhere.