Some are leaving and for those staying on, prospects of allowance cuts loom.
SINGAPORE is still one of the 10 most expensive cities for expatriates to rent housing, a survey has found. Comparing residential rents in 300 cities for expats, Mercer placed Singapore in tenth spot for costs in February this year. It ranked ninth in September 2008.
According to Mercer, weakening demand for property caused rents to ease and helped Singapore move down a notch on its rental property index.
Property consultant DTZ said in a report this week that average monthly rents for luxury condos and apartments in prime districts fell as much as 18.8 per cent in Q1 2009 to $5.20 psf from a quarter earlier. This brought rents back to Q3 2006 levels.
'The leasing market bore the brunt of corporate downsizing and increased supply from new completions,' DTZ said. 'Some investors have resorted to renting out their units for the time being, hoping to sell when the market recovers.'
Other property consultants have noted that expats are leaving Singapore. And for those staying behind, there is the prospect of a cut in allowances.
Mercer says Hong Kong is in a similar situation. Ranked last year as the second most expensive city for expatriate rental housing, it now takes third place after the economic slowdown eroded demand.
While Singapore and Hong Kong have slipped down the chart, a few other Asian cities have become costlier places for expats to rent as their currencies rose. Because Mercer based cost comparisons on the US dollar, exchange rate movements affected rankings.
'The world's housing markets have been sliding since 2008, and strong currency fluctuations in the past few months have also had a strong impact on the comparative cost of expatriate housing,' said Mercer's information product solutions business principal and Asia-Pacific global mobility leader Cathy Loose.
Tokyo, for instance, has moved up one spot from last September to second place on the rental property index as the yen appreciated 17 per cent against the US dollar. And Beijing has jumped four spots to number six. Together with Mumbai and New Delhi, six Asian cities are in the top 10.
Moscow leads the latest index, while New York City, Geneva and London take fifth, seventh and ninth positions respectively. London has fallen five places from last year as the pound depreciated and residential rents softened.
In the region, Jakarta, Kuala Lumpur and Bangkok are ranked 34th, 36th and 44th respectively. 'Over the next few months, we would expect to see a general decline in rents due to the economic slowdown,' Mercer said. In Singapore, DTZ says average monthly rents for non-landed luxury homes could drop 25 per cent or more this year.
Companies sending their employees abroad will benefit from falling rents, Mercer noted: 'Multinational companies should closely monitor the changes in markets so as not to lose out on opportunities for cost savings.'
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