Rental Increases?!!?! :(

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Marlowe
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Post by Marlowe » Sun, 03 Jun 2007 9:01 pm

i have had the (mis)fortune of living in san francisco, sydney & london over the course of the last 15 years, and all i can say is, what we're seeing in singapore is not unusual, surprising or excessive.

i have begun to have people who work for me ask if they are going to get bigger raises this year since their rent has increased. i think there must be some collective delusions going on. if your rent increases by $2000/month and you think that's excessive, you should MOVE. there are heaps and heaps and heaps of places in singapore that are a bit further out that are very nice & affordable. i think a lot of people are a bit spoiled by life here and think that they somehow 'must' have no more than 15 minute commute to work.

petrol prices have gone up significantly in the last 2 years, so i stopped driving a car. it's more inconvenient, but i'd rather sweat it out on a bus than pay exhorbitant petrol fees. it's the same thing.

no one owes you anything in life and you have to make decisions that are best for you, given your situation, your station in life, and the external environment.

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Post by riversandlakes » Mon, 04 Jun 2007 7:21 am

Wait till you hear $1600 to $3500 increase!
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Post by huggybear » Mon, 04 Jun 2007 11:08 am

i agree more with Marlowe.

If you don't want to be subjected to the market forces of the rental market. Then buy property. I understand there are difficulties to this as a foreigner. but now you should be able to buy property.

Many people still own real estate from 1997 and ARE JUST BREAKING EVEN now this year...10 years later.

anyways. why is the landlord obligated to agree to set monthly increases of 2%? is that what you want?

I really have no sympathy for people that are whining about their huge rental increases. There are tons of other places to live there and sure moving is a pain in the arse but you gotta do what you gotta do and other people have much bigger problems in life so stop complaining.

My friend found a 2k sq ft shop house in the east coast for 2k, my other friend has a great 1,500 sq ft 2 br in east coast for under 2k. There are properties out there that are undervalued (or for those who have been shielded or perhaps haven't opened a newspaper to see the MASSIVE growth in the past 3 years in Asia). You have to look.

I wouldn't support rental price controls because no one wins with that. I think the best route is an MLS type system where you have to list your property for rent / sale on a public website and everyone can see the entire market. That would be the great equalizer (information delivery) NOT crappy price controls.

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excessive rent hikes

Post by German_Expat » Mon, 04 Jun 2007 11:14 am

the fact that these excessive rent hikes are common is no justification to say this is reasonable. If I have to expect such huge increases everytime my lease runs out after two years then there will come a point where I will move out of Singapore altogether. My wife and I have already discussed this possibility and are planning now to do so in two years time. Even earlier if we see an opportunity that we cant let pass. This kind of huge housing boom and bust situations happened in Europe in the early 90s and a lot of people lost out big time due to speculative buying. The market is mostly hyped up by property agents and governments with very optimistic forecasts (after all, they need to create a feel good factor). The latest hype talk is the upcoming integrated resort. But dont be fooled, it wont miraculously put more money into people's pockets. It's a way of keeping the Singapore economy from shrinking. Manufacturing is already becoming too expensive here, and Singapore was built on that, so now something else has to be thought of to keep up with the world financially and the integrated resots is one of those new things.

Singapore is a nice place for now but is fast becoming not that ($$$$$) nice anymore.

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Re: excessive rent hikes

Post by huggybear » Mon, 04 Jun 2007 12:45 pm

German_Expat wrote:the fact that these excessive rent hikes are common is no justification to say this is reasonable. If I have to expect such huge increases everytime my lease runs out after two years then there will come a point where I will move out of Singapore altogether. My wife and I have already discussed this possibility and are planning now to do so in two years time. Even earlier if we see an opportunity that we cant let pass. This kind of huge housing boom and bust situations happened in Europe in the early 90s and a lot of people lost out big time due to speculative buying. The market is mostly hyped up by property agents and governments with very optimistic forecasts (after all, they need to create a feel good factor). The latest hype talk is the upcoming integrated resort. But dont be fooled, it wont miraculously put more money into people's pockets. It's a way of keeping the Singapore economy from shrinking. Manufacturing is already becoming too expensive here, and Singapore was built on that, so now something else has to be thought of to keep up with the world financially and the integrated resots is one of those new things.

Singapore is a nice place for now but is fast becoming not that ($$$$$) nice anymore.
The early 90s had other extraneous factors. I don't think it's accurate to just willy nilly to throw out personal experiences from a specific point in time in a specific geographical area. Furthermore, you are talking about a short length of time with the run up in singapore real estate prices.

In the early 90s, the United States went into a recessions. We have a saying, when the US sneezes, the world catches a cold. Oil prices spiked, the US went to war against Iraq and then the US entered a recession. If the US goes into another recession then Singapore real estate will tank. Compared to global markets over the past 5 years, Singapore has really lagged the real estate markets of:
USA, Britain, Seoul, Hong Kong, Shanghai, etc

The world is a global place and singapore is catching up. You are more then welcome to vote with your feet and leave. That is how the true market place should work.

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Post by ScoobyDoes » Mon, 04 Jun 2007 12:55 pm

huggybear wrote: There are properties out there that are undervalued (or for those who have been shielded or perhaps haven't opened a newspaper to see the MASSIVE growth in the past 3 years in Asia).

I think the best route is an MLS type system where you have to list your property for rent / sale on a public website and everyone can see the entire market. That would be the great equalizer...
You can't get both.

The equalizer is that those undervalued will no longer be such. And somebody renting out an apartment puts his price $100 higher than the next guy and slowly but surely the underlying rate goes up and up.

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Post by ProvenPracticalFlexible » Mon, 04 Jun 2007 12:58 pm

huggybear wrote:i agree more with Marlowe.

If you don't want to be subjected to the market forces of the rental market. Then buy property. I understand there are difficulties to this as a foreigner. but now you should be able to buy property.

Many people still own real estate from 1997 and ARE JUST BREAKING EVEN now this year...10 years later.

anyways. why is the landlord obligated to agree to set monthly increases of 2%? is that what you want?

I really have no sympathy for people that are whining about their huge rental increases. There are tons of other places to live there and sure moving is a pain in the arse but you gotta do what you gotta do and other people have much bigger problems in life so stop complaining.


I wouldn't support rental price controls because no one wins with that. I think the best route is an MLS type system where you have to list your property for rent / sale on a public website and everyone can see the entire market. That would be the great equalizer (information delivery) NOT crappy price controls.
Yeps, those crappy rental increase controls usually end up creating a "black market" or whatever you call the cash payments in addition to the rent. If rents are getting too high related to apartments price, I would buy. But I still counted that it would come quite a lot more expensive to buy than rent here in the east.

Where does this idea here come to many people that you should be able to afford a 4BR next to Orchard with pool and facilities. I mean did all these people really live in a penthouse in smack middle of London or NY earlier? and if they did these prices should not be a huge suprise. Even in Paris I couldn't get half of what I get here for my money, if someone would even rent to foreigner.

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Post by huggybear » Mon, 04 Jun 2007 1:48 pm

ScoobyDoes wrote:You can't get both.

The equalizer is that those undervalued will no longer be such. And somebody renting out an apartment puts his price $100 higher than the next guy and slowly but surely the underlying rate goes up and up.
Yes this is called inflation. Central banks try to control the rate of inflation. House prices can go up this much because it still only costs you $3 for Kway Teo or whatever that noodle dish is called. So while one sector is hot (real estate) other prices are coming down or are flat (cars, food, travel, mobile phone) so the overall rate of inflation is steady near 2% which is comfortable. Furthermore, they are cutting the tax rate (but raising GST) so net net you are seeing an increase in pay (unless you're american like me and subjected to their draconian tax laws).

PPF nice comments.

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Post by EADG » Mon, 04 Jun 2007 9:45 pm

though I find myself agreeing with huggy on most things, I'm with riversandlakes and german_expat on this one

cost ofliving and rental increases are one thing, and most us have been on both sides of up- and down-markets

this is just shy of obscene extortion, and yes, in a similar fashion to how people crowd into elevators here the owners are falling over themselves to get the expat dollar, and the agents are delerious with the same bloodlust

'love it or leave it' commentary really serves no useful purpose in this context

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costs are coming down??

Post by German_Expat » Tue, 05 Jun 2007 10:56 am

I am not so sure about costs coming down, food is more or less flat but not coming down. As an expatriate on a local contract I find it increasingly unattractive staying here. For one, I have family in Europe that I want to visit once a year but this is also becoming more expensive. Flight ticket prices are increasing drastically, and if housing prices are going so high this will take a big chunk of money away and will eventually make me have to choose to either see my family regularly or to stay in Singapore. What would you choose? Not many Companies here pay housing allowance for a stay over 2 years, so having been here two years already I have to pay my own rent now. This efectively reduces my salary.

Dental treatment is horrendously expensive, medical treatment too, scools are expensive, I dont even think about getting a car here(the first country I have been in without a car)..... so this 'love it or leave' attitude is just adding to a list of reasons against staying here and is usually the last comment when nothing else constructive comes to mind.

The achievement of the founder leaders of Singapore has been remarkable, high housing costs can easily damage this achievement. Singapore only has human resources to work with. A large part of the population is getting old, younger generations dont want to start a family and guess why? increasing housing costs, dental costs, medical costs, schooling costs, etc, etc.... the government is already creating incentives for foreigners to come here, but those foreigners have to live somewhere and that somewhere is shooting up in price.

My suggestion would be to make it compulsory for owners to list property that is for rent or for sale together with the asking price. Also, why on earth is there a need to have two agents? The owner pays a fee to one agent and the tenant to the other? For what? Agents are some of the worst culprits for driving up housing costs because they work on a fee tied to value basis which give them plenty incentive to drive up the price. A better way would be a flat fee, decoupled from the price but tied to the level of service quality they provide. Then there would be no conflict of interest and there would still be competition. These agents would then compete against each other in terms of service quality..... good for the consumer and agent alike.

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Re: costs are coming down??

Post by ProvenPracticalFlexible » Tue, 05 Jun 2007 12:30 pm

Always difficult choices and it is a balance where you feel comfortable, but still I do not see any difference in the housing market and how it works here or in other non regulated market. Prices are free for inflation, if you ask too much no one will buy or rent it. Now of course agents are trying to make a panic so people would sign without thinking too much.

About housing allowances, without the high housing allowances some companies are providing I doubt the rental market would be going so crazy. I think that’s quite a common thing all over the World that most people pay the rent from their salary. Anyway rising housing costs will eventually have an impact on salaries. When the level comes that people rather work somewhere else with lower salary than now for example in Singapore because of the difference in living costs. I still think that the level is not here. Other financial capitals London and New York etc are still far more expensive.

What comes to the medical and dental costs I found them being much cheaper here than in Europe, unless you are covered by government subsidies. A visit to a private doctor costs here less than half what I’m used to. So can’t complain too much. Private schools for sure cost much, but they do so also in Europe. What for me makes the biggest difference is that here, I pay low (I mean ridiculously low) income tax, and can choose myself where do in spend my money, be it nicer apartment, or full medical insurance, or save the money. In the Europe I had the pleasure of having the government deciding with 40-50% income tax how I or others spend on education, healthcare etc.

Even flights to Europe from Singapore seem to be about 10-20% cheaper than from Europe to Singapore. But you’re right flight prices have been going up.

By the way there is no need to have 2 agents, you can have only one, but that one usually works primarily for the owner, and will still charge the same for doing both sides of paper work. Yes and I agree with you that a commission based on rental amount feels quite a lot for a filling in a few ready made templates. The system based on commission does not really make your agent to wish you to find a low rent place.

I’m not even sure if there are any laws here stopping you from renting directly from owner, and thus avoiding all agent fees. That would of course require you finding your place yourselves and doing the paper work.

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Post by German_Expat » Tue, 05 Jun 2007 1:16 pm

In Europe we get state subsidies and state health insurance(hence the 40% to 50% tax) private doctors are expensive everywhere but here there doesnt seem to be a choice.

I recently went to a neighbourhood dentist who tried to refer me to a colleague in Orchard Road saying they dont do this kind of treatment there and I need to see a specialist. I then asked why list that treatment in the price list if they dont do it and promptly got another apointment at the same clinic but with a different dentist who does this treatment. So, it seams to me that being a foreigner you still get 'fleeced' one way or another.

My wife and I only consider private schools because the lack of (good) standard of teaching in public schools. Our kids would go to school speaking accent free English and come home speaking Singlish :shock:

London and New York, yes they are ridiculously expensive and I wouldnt dream of living there.... not even going to work there.

My salary here is exactly half of what I would get in Europe and I was happy with that even up to a year ago. But now that the company housing subsidy is gone and the rents have also increased, flights have gone up, I am no longer happy here. Yes, some companies are providing extremely high housing allowances but that is also starting to dwindle away. Even US companies are beginning to drop the housing allowance.

We moved from the east coast to jurong west just to keep the apartment rental cost stable. But if in two years this is still going up I wont stay here.

Its just not worth all the hassle especially when you still get ripped off by your landlord when it comes to give back the security deposit.

Salaries here are not keeping up with rising costs.

and finally..... I am only here because of my wife. She has family here or else I would not be in Singapore now.

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Post by ProvenPracticalFlexible » Tue, 05 Jun 2007 2:55 pm

German_Expat wrote:In Europe we get state subsidies and state health insurance(hence the 40% to 50% tax) private doctors are expensive everywhere but here there doesnt seem to be a choice.
As in Europe you don't have a choice, you have to pay the full tax, evenif you don't use any subsidies. Visit to a GP used to cost me 35-50 euros, plus the pharmacy bill. Here similar visit was only 25S$ and that included medicine. So I call it cheap here.

I'm not saying there's a wrong or right way to organise healthcare. It's a value thing: some like the european or nordic model, where all contribute to common pool to cover the costs and others prefer that everyone pays for oneself.

I'm sure salaries will slowly adapt to higher living costs. Not immediatelly of course. Or let's put it the other way, when no one can afford the costs anymore costs will go down, including housing costs.

But as you it's our personal choices and preferences. I left Europe for 2 key reasons:
1st awful weather most of the year in the North, where jobs are, and
2nd ridiculously high income taxes.
Could list some other ones too, but those 2 above the rest. Not that I couldn't list some reasons to stay there too.

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increasing costs

Post by German_Expat » Mon, 11 Jun 2007 1:19 pm

I came to Singapore for one reason mostly, my wife has her family here. My first choice otherwise would have been Malaysia. I personally hate city life, I like nature. Even nature here in Singapore is heavily controlled.

My reason for Asia..... weather and food and lower costs :-) I used to live in the UK and the weather there is depressing. Tax was never a reason for me to move, in Europe I can see the benefit of higher taxes.... up to a limit off course. Housing prices in major cities are hight wherever you go. When I came here in 2005 I thought prices were high here but still at least value for money, in the UK everyone gets ripped off without getting value for money.

GST is going up next month and NETS have also decided to add their bit. Where will it end?

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Post by k1w1 » Tue, 12 Jun 2007 3:19 pm

Wow, huggybear. Are you an agent or a landlord? Both?

There are more and more people here on local contracts. Companies don't give a stuff if the rent goes up, as this probably means their rent is going up too. There are people who are willing to come here and work - replace those who are going to start leaving in droves. However these people are not going to be employed on higher salaries "in line with costs of living" either. These people coming in (if the government has their way) are going to be from MC and India. They are not going to be in a position to pay the increased rentals either.

I guess you may as well make hay while the sun shines.

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