Singapore – For marketing professional Benedikt Becker, living and working in Singapore had always been ‘the dream’.
Becker, who landed a job at a Singapore marketing agency in 2020, thrived on the city-state’s vibrancy as a business hub, enjoying its efficiency, “impressive” skyline, verdant greenery, and architecture. For 2,800 Singapore dollars ($2,072) a month, the German national rented a one-bedroom boutique apartment in eastern Singapore, which enabled him to take daily morning walks to the beach.
But as the cost of living rose, Becker began to rethink his situation. He noted that his Grab rides to the office cost 22 to 25 Singapore dollars ($16 to $18), up from 12 to 14 Singapore dollars ($9 to $10) when he first arrived. Friends started reporting that their landlord increased their rent by 20-30 percent.
According to global real estate company Savills, rents in Singapore in the key residential market will rise more than 26 percent by 2022, more than double the growth in London, Sydney and New York.
In January, the city-state government raised its goods and services tax (GST) by 1 percentage point to 8 percent ahead of a planned increase to 9 percent next year.
Last year, 33-year-old Becker decided to move to Malaysia’s capital Kuala Lumpur, where he took a pay cut to work remotely for a German tech start-up looking to expand into Southeast Asia.
Since the move, Becker said he’s been able to save “so much more”.
He now rents a room in a co-living space under a flexible lease for S$800 ($592) a month, orders GrabFood for most meals for about S$30 Malaysian ringgit ($6.55), and works from several co-working spaces. working spaces.
“There’s a saying, if you don’t like the rules, change the game… so moving from Singapore to Malaysia was my way of changing the game to keep the cost of living down,” Becker told Al Jazeera.
For now, Becker’s priority, aside from saving money, is to experience other Asian cities like Bangkok or Ho Chi Minh.
Becker is among a group of expats who have left Singapore for cheaper Southeast Asian cities, propelled by a surge in rents and the cost of living as the economy recovers from the COVID-19 pandemic.
Although there is no official data on the number of foreign workers leaving Singapore, multinational companies are increasingly seeking to move staff from the city to cut costs, recruitment agencies said.
There has been a “strong appetite” to move staff from Singapore to neighboring Malaysia due to its location, English-speaking population, lower cost of living and strong presence of back-end office functions, Michael Page Malaysia’s general manager Nic Chambers told Al Jazeera.
“Singapore still has a very important role to play. CFOs and CEOs of listed companies will still want to stay in Singapore due to its proximity to investors, private equity firms and venture capital firms. However, I fully expect that over time we will even see some of those C-suite positions move to Malaysia,” Chambers said, adding that he has also seen an increase in talent requesting US dollar salary packages to reduce fluctuations in the value of the ringgit.
American software engineer Will Fong also started to suffer from rising rents in Singapore.
Fong was renting a one-bedroom apartment in Jurong East in western Singapore for S$2,600 ($1,924) when his landlord proposed raising the rent to S$3,500 ($2,591). With the help of his agent, he managed to negotiate the rent to 3,000 Singapore dollars ($2,220).
“I’ve heard how crazy things get… It would be way too expensive if I agreed to that rent,” Fong, 41, told Al Jazeera.
Fong decided to work remotely in Vietnam, first to Ho Chi Minh City for two weeks and then to Da Nang for a month. In the long term, Fong plans to rent a room in Singapore to use as a base for travel and remote work in Southeast Asia.
“I can have both places and it will still be cheaper than going out and eating out in Singapore,” said Fong, who lives permanently in Singapore.
“I’m pretty quiet… I just need a place to sit and drink my beer, do my work wherever I am and it’s much more relaxing. Right now I’m playing outside of Singapore for a while… It’s like going camping,” he said.
While expatriates have left Singapore due to high rent and living costs, this has been “compensated by large numbers of expatriates from other regions and a shift to C-suite expatriates taking advantage of the new Overseas Networks & Expertise (ONE) Pass” – a visa that allows eligible talent can work for several companies at the same time – according to recruitment agency TENTEN Partners.
Operating from London, Singapore, Hong Kong and opening soon in Dubai, TENTEN Partners’ clients range from mid- to senior-level employees in financial services, fintech and consulting firms.
“Western candidates look for work in countries with low tax rates and a higher quality of life. Singapore is still attractive for its infrastructure, low taxes and family-friendly environment,” Luke Archer, managing partner and co-founder of TENTEN Partners, told Al Jazeera.
“But B-level executive salaries are often not high enough to convince candidates to make the switch. Instead, we are placing more expats in the Middle East. Hong Kong is still a tough sell for candidates, while Singapore remains a more attractive option.”
Those on the margins are more likely to feel priced out of Singapore’s rental market and would reconsider moving here for work, said National University of Singapore business professor Sumit Agarwal, who specializes in finance, real estate and economics.
But while there is some degree of outflow, the influx of expatriates is relatively higher, as Singapore is still very much regarded as a “safe haven,” Agarwal told Al Jazeera.
Singapore ranks number one in Asia for attracting and enabling talent according to the INSEAD Global Competitiveness Index 2022, and maintains its spot as the most livable location for East Asian expatriates in the ECA International 2023 Location Ratings Survey.
The Singapore government has downplayed suggestions that the city-state’s status as a global talent hub could be in jeopardy, highlighting that COVID-19-induced rental imbalances are beginning to ease.
“2022 rent increases reflected exceptional supply tightness due to severe COVID-19 disruptions in the construction industry, as well as strong demand from expatriates and local residents,” said the Ministry of National Development (MND) and the Economic Development Board (EDB). ) said in a joint statement.
“During the pandemic, rental demand increased from locals who rented in anticipation of their properties being delivered. With the relaxation of border restrictions last year, rental demand from foreigners also recovered quickly, which put further pressure on the rental market.”
The MND and EDB said they expect rental pressures to ease in the coming quarters, with a large supply of housing units expected to be built this year and for years to come.
About 40,000 homes are expected to be completed this year in the public and private housing market, the highest number in the past five years, the government said. The government also expects that nearly 100,000 public and private homes will come onto the market between 2023 and 2025.
“We continue to attract significant investment from companies, founders and investors seeking a stable foundation to tap into Asia’s growth and create new products and services for the world, as well as jobs for Singaporeans,” the MND and EDB said.
Although Becker is happy with his move, he misses some things about Singapore and returns to the city every two to three months on business.
“I miss the vibrant start-up and business scene in Singapore where I get to interact with founders and marketers at many networking events,” he said.
“Singapore has much more to offer than Kuala Lumpur in that respect.”