Singapore – Australian citizen Ben Dunn and his family consider themselves “Aussie-poreans”. He has lived in Singapore for 16 years and his children aged 10 and 13 were born here.
The Dunns are drawn to Singapore’s “melting pot of people and ideas”, sunny climate and livable environment and enjoy enjoying the greenery at Botanic Gardens, visiting Queenstown Library and eating hawker food at Tiong Bahru market.
But after watching the monthly rent for the family’s condominium rise from $7,000 to $11,000 ($5,242 to $8,238) in just a few months, Dunn and his wife made the difficult decision to return to Australia when their lease expires in June.
“Since the pandemic, we have been thinking about the right time to return home after being away for so long,” 51-year-old Dunn, who works in finance, told Al Jazeera.
“We love living in Singapore, but with the cost of living rising and wages not rising proportionally, this rent increase will have a serious impact.”
Amidst the concerns about rising rents and the potential impact on Singapore’s allure as a regional business hub, there is a growing demand for financial apps for expats living in Singapore to manage their expenses better.
While there are no official numbers, Dunn is among a growing pool of expats leaving Singapore because of skyrocketing rents, raising concerns about whether the Southeast Asian city-state is at risk of losing its allure as a regional business hub.
Average rents in Singapore, where about 40 percent of the population is foreign-born, will increase by 30 percent by 2022 — the fastest pace in 15 years, according to data from Singapore’s Urban Redevelopment Authority.
Rising prices are due to a range of factors, including a shortage of housing supply due to pandemic-induced construction delays and strong demand from businesses and talent to move to the city, in part due to China’s crackdown on the private sector industry and Hong Kong.
The number of holders of a work permit and S-pass – the main visas issued to foreign professionals – grew from 323,500 in 2021 to 365,200 in 2022.
International and local business communities have also raised concerns about the rising cost of residential and office space here.
Seven in 10 foreign and local companies are ready to relocate staff if costs don’t come down, while half of expats who recently extended their leases have seen their rents rise by more than 40 percent, according to a survey by the European Chamber of Commerce in Singapore (EuroCham).
APAC Relocation, an international moving company, said it has seen about 10 percent of its clientele move in the past five to six months because of rising rents.
Many expats are also choosing to downgrade from private estates and larger apartment blocks in Singapore’s city center to smaller apartments and even public housing in suburban areas, Unni Krishnan, relocation manager at APAC, told Al Jazeera.
Melody, a Taiwanese national in her thirties, arrived in Singapore two years ago with a promising career in the tech industry and dreams of taking root in the city with her partner.
But last year she was hit with a double whammy. She had been cut in recent tech layoffs and the monthly rent for her two-bedroom apartment in Newton was increased from S$4,000 to $6,500 ($3,000 to $4,870).
She’s heard similar stories from friends’ landlords raising rents by 60 to 100 percent.
For Melody, the situation presented the difficult choice to either stay on and “get through the situation with barely any savings,” or move somewhere with a lower cost of living. She plans to return to Taiwan at the end of April.
Melody believes that the current rental situation and lack of government intervention have created an unfriendly environment for mid-market expats like herself.
“It is sad to hear these stories. For the people who come here, Singapore represents a land of opportunity, an exciting Asian business center where you are surrounded by diverse people and cultures and where your children grow up in an international environment,” Melody, who asked not to be identified by her real name, Al Jazeera told me.
“It was a really nice package… before all this happened. In times like these it makes us feel so easily redundant and just let go easily and nothing is being done to hold us down.
Similarly, Ari had jumped at the opportunity to work in Singapore. He holds a senior position in the food and beverage industry and moved here a year ago with his wife and young daughter.
When their lease expired in January this year, the landlord increased the rent by 50 percent — from 5,000 to 7,500 ($3,747 to $5,620) — putting a significant dent in their savings. Some of their friends were hit by rent increases of 70 to 80 percent.
To cope, Ari and his family cut back on spending by eating out less, taking public transportation whenever they could, and turning off the air conditioning. Although Ari considered looking for a cheaper apartment elsewhere in Singapore, he was disappointed to find that even rents in remote locations were not immune to the increases.
By the end of April, Ari plans to look for a new job elsewhere and leave Singapore.
“It’s just really disruptive and it’s a shame we have to leave Singapore,” Ari, who requested that a pseudonym be used, told Al Jazeera.
Joshua Yim, CEO of the Achieve Group, has seen companies turn to creative solutions to cope with rising costs.
Yim, whose talent acquisition company recruits workers in various fields including technology, banking and pharmaceuticals, said some multinational companies with regional headquarters in Singapore are moving their workforce to lower-cost cities such as Kuala Lumpur, Jakarta and Bangkok where they can work remotely and to the city-state only when necessary.
Yim has seen countless expats leave Singapore due to rising rents over the past six months, while others negotiate better packages, “after doing their research on Singapore”.
Still, companies today may not be able to offer such nice packages and rent allowances as they did in the past, Yim added. The effect of rising rents may also be felt less strongly among higher-level expats earning $250,000 and more per year.
While the topic is the talk of the day in the business community, Yim said he is optimistic the situation will improve by the end of this year. He foresees that the government will take steps to prevent further erosion of Singapore’s competitiveness.
Albert Tsui, executive director of advocacy and policy at the Singapore Business Federation, pointed out that supply chain disruptions and inflation have contributed to operating costs and rising rents.
But while rising costs may pose a risk to Singapore’s attractiveness, companies are keenly aware that several factors play a role in determining the country of choice for investment, Tsui said.
“What continues to set Singapore apart is our easy access to global talent, robust infrastructure and the institutions that can protect the value of corporate assets,” Tsui told Al Jazeera.
“Singapore’s stable political climate and business-friendly environment also promote corporate sustainability, making us an attractive destination.”
In response to concerns that high rents could undermine Singapore’s ability to attract foreign talent, the government has urged close monitoring of the property market, including the residential rental market.
“That being said, when making relocation decisions, international talents take into account many other factors besides rents,” said Development Minister Desmond Lee last November in response to parliamentary questions.
“These include Singapore’s position as a global business hub, our strong external connectivity, our good trade relations, our education and healthcare standards, and quality of life.”
However, for expats like Dunn, the situation has made it difficult to stay on.
“We are leaving with a heavy heart, but we are very torn by it,” he said.