Rental Increases?!!?! :(

Discuss about where to live, renting a property, tenancy issues, property trend and property investment in Singapore.
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ching
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Post by ching » Tue, 17 Jul 2007 9:33 pm

Our property agent made the same comment - her clients who arrived in 2005-2006 when rents were low are a lot more upset by today's rent increases, than those who moved here several years ago when rents were at their peak!
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Post by saidean » Thu, 19 Jul 2007 1:54 am

Part of the reason is that the increase and the degree the increase is occurring, is unanticipated. When people emigrate, the expected rental costs for X number of years have to be factored in. However, the sharp increase over the past year has caught quite a lot of people offguard. Whatever the reasons are for increasing the rent, most companies and expats are not ready for the increase and hence the angst.

When the market stabilises, whether at a high or otherwise, I think things will get better.

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Post by huggybear » Thu, 19 Jul 2007 8:45 am

correct newbie
but there is a disconnect. if you happen to read ANY NEWS AT ALL. all you read about is that
(1) this is the new century ... a century where Asia will roar
(2) China is driving the region and growing enormously (11% GDP growth y/y compared to US growth of around 3% or pathetic European growth of less then 1%)
(3) Singapore wants to grow the population from 4 million to 6 million

all that being said ... if the # of houses remains same but population increases 50% ... well what do you think will happen to house prices?????

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Post by LT » Thu, 19 Jul 2007 3:10 pm

Supply over demand... Price sure to shot up...
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population increase

Post by German_Expat » Thu, 19 Jul 2007 3:53 pm

There is no way that Singapore will achieve such a population increase. Locals are reluctant to have children because of the ever increasing costs and foreigners are reluctant to relocate to here because of the high cost of living. There will always be some people coming here but I think the influx needed to increase the population that much will not happen in the current climate of living costs. The child bonus packages from the government are only a drop in the ocean compared to the cost of bringing a child up. Health costs and education being the main costs have gone up so sharp in the past three years. If the government were to set some strict standards in state schools comparable to private schools then things would improve. No learning Singlish in school from teachers for example ;-)..... this is the main objection my wife is giving against putting our children into state schools when they are ready. We are not planning on staying, and my children will have German nationality before we leave in 2009.

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Post by ProvenPracticalFlexible » Thu, 19 Jul 2007 4:28 pm

huggybear wrote:correct newbie
but there is a disconnect. if you happen to read ANY NEWS AT ALL. all you read about is that
(1) this is the new century ... a century where Asia will roar
(2) China is driving the region and growing enormously (11% GDP growth y/y compared to US growth of around 3% or pathetic European growth of less then 1%)
(3) Singapore wants to grow the population from 4 million to 6 million

all that being said ... if the # of houses remains same but population increases 50% ... well what do you think will happen to house prices?????
Huggy, I agree with you basic points (Asia growing and China especially), but I wonder what news you read to get you figures as they seem pretty unreliable. Could you kindly tell me one European country that has currently less than 1% growth? European growth is actually at the moment faster than US, for Q1 2007 figures: 1.9% in US and 3.0% in euro area. Not to mention that European Union covers the 12 new members states of former eastern block that have growth figures between 3%-8%.

Also Singapore population is closer to 4.5. So 6 million would be “only”

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Post by huggybear » Thu, 19 Jul 2007 4:40 pm

[quote="ProvenPracticalFlexible"][quote]

Huggy, I agree with you basic points (Asia growing and China especially), but I wonder what news you read to get you figures as they seem pretty unreliable. Could you kindly tell me one European country that has currently less than 1% growth? European growth is actually at the moment faster than US, for Q1 2007 figures: 1.9% in US and 3.0% in euro area. Not to mention that European Union covers the 12 new members states of former eastern block that have growth figures between 3%-8%.

Also Singapore population is closer to 4.5. So 6 million would be “only”

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Post by monne » Mon, 23 Jul 2007 9:39 pm

Hi,

I am also aware that the rents are going up... my landlord just informed me that he wants to increase from 1700 SGD to 3400 SGD... that is an increase of 100%.... I don't think this is reasonable or did the market go up like this????
Any idea what to do? I rented my apartment for 2 years with the option to renew for one year and it is stated "... grant to the tenant a tenancy of the said premises for a further term of one year from the expiration of the tenancy hereby created at the prevailing market rent and upon the same terms and conditions." I was told that "same terms and conditions" means the same rent... that was obviously not the case?!
Help...any opinion, input, advise?

Monne

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Post by ScoobyDoes » Tue, 24 Jul 2007 10:44 am

monne wrote:Hi,
Any idea what to do? I rented my apartment for 2 years with the option to renew for one year and it is stated "... grant to the tenant a tenancy of the said premises for a further term of one year from the expiration of the tenancy hereby created at the prevailing market rent and upon the same terms and conditions." I was told that "same terms and conditions" means the same rent... that was obviously not the case?!
Help...any opinion, input, advise?
You only read what you wanted to read then..... "....created at the prevailing market rent and...." and at the moment your landlord thinks that is the market price on your apartment.

Try to prove him wrong, if you can.

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Post by MblSH » Thu, 26 Jul 2007 4:06 pm

Hi,

Read the whole thread and more than once saw people saying that moving away from central districts or renting an HDB is a solution to price increase.

Well, I live in Simei which is hardly central; I chose it when I moved to Singapore two 2 years ago mainly because it's close to work (I work in Changi Business Park, next to the Expo). Incidently, I work for a major investment bank and to my knowlege, nobody but the very top brass have any housing allowances, and even then they are only for first six months of settling in. Our biggest concurents do not have any housing allowances either, so I don't really know why everybody has a notion that working in a finantial institution automatically entitles you to some allowance/package/whatever. On the other hand, if anybody knows a bank that needs a good senior developer and pays a rental allowance, please let me know and I'll submit a CV right away :D

Anyway, to give you the picture, rental prices for 2-bedroom units in the condos right now are from 2.5 to 3.5 K, depending on how close the MRT is and how badly trashed is the unit in question. Half a year ago the same units were going for (1.3 to under 2K - there were no 2B units for more than 2K, and even that was expensive). There are condos farther to the East that are still cheaper, but there's not even a bus service there, so you can't really live there without a car. All you have is a condo shuttle going to MRT every half an hour or so and even that is from 10 to 6.

Now on to HDBs; we have a lot of people coming in to the bank during the last years, mostly from India. It was never a problem for them to find an HDB in the area for around 1K. Now they are struggling to find anything at all around 2K. Again, that's tampines/simei/pasir ris we're talking about. The only solution to them is to share a flat between 2-3 guys; but what do you do if you have a family, move to Woodlands or Johor? Some have already started to move back to India; lots of replacements are outright deceived by vendors saying that you can rent and HDB for 8-9 hundreds; but at that point they have already severed links with home country and made a leap coming here - you don't go back easily on a decision like that

As for free market rules, landlords not being greedy and 'people supporting ridiculous prices', my condo and lots the HDB's in the area now have nice pricelists hanging outside the properties stating what management offices think the rental prices should be. Good luck arguing with that when you're talking to landlord - all he/she has to do it to point to that pricelist. And according to that my rent is due to 70% increase. Given that the property price only increased by 20-30%, what is it if not the desire to make a quick buck off the suckers coming from abroad.

Well, this post turned out to be longer than I thought :)

Cheers,
Max

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Post by German_Expat » Fri, 27 Jul 2007 11:57 am

Good Post this last one and it reflects the reality. I also lived in the east and moved to the west to get an apartment that is close to reasonable. But now it takes me 1 1/2 hours to get to work where before it took me half an hour. I have friends who live in Johor and commute and they take the same amount of time but pay 1/5th of the housing cost.

All this price hype is artificially created and mostly through greed and downright deceit by property agents and developers. I also know of people who came here and left the moment their housing allowance was cut. When I arrived I was happy with the rental prices, although even then I thought they were not much cheaper than in Europe. I even considered becoming a PR but my view has changed since and now I applied for the new Personal Employment pass and in a years time I am planning to move to Johor but continue working here.

Accomodation costs have gone up first, then medical charges, transport costs, now everyday items.

And everyone is banking on this intergated resort and the casinos. Maybe there will be a small number of millionaires from gambling but in their wake there will be thousands of people in debt, no matter how many counselling places the government sets up. I think this IR will be the undoing of Singapore. My prediction is that increased crime rate is only a few years away....

A shame, Singapore has achieved a lot in a short time but that kind of growth can not be sustained. Its easy to build something from almost nothing but to build further and expect the same kind of growth is unrealistic. An economy can burn itself out too..... If however essentials like housing, food, health and utilities are tightly controlled, then a steady and reliebale growth can be realised. Right now it seems like a boom and bust economy. Today we see a boom, tomorrow the bubble will burst. I have no doubt about what is coming soon.... No point sticking our heads in the sand and expecting this to go away like some people seem to do.

Already people talk about income per household rather than personal income indicating that it is becoming more necessary for family members to club their money together to make a decent living. One TV for an extended family rather than one per individual family, one refrigerator per extended family rather than one per individual family, etc.... driving down numbers sold, reducing jobs in those areas, reducing extended family income, less purchases...... older people have to work longer rather than retire, I took a cab the other day and the driver was so senile it scared me.

Food stalls are reducing their portions to keep the price the same but eventually those reduced portions will increase in price too, the only things that are not catching up are salaries and wages. So, work out for yourselves what is going to happen to the government's policy on attracting foreign talent, increasing population, etc..... who in their right minds will want to raise children in this climate of boom and bust? look at education costs....

My prediction is that within 12 months there will be a cold and sobering shower for those who are now buying homes, an increase in bankrupcies, cheap auctioning of properties so that banks can recover at least part of their loans and those who just bought into a new development where the units wont be ready for another year or two will loose everything, developers will liquidate, we will hear of court cases for fraud and misrepresentation.... etc.

but look on the bright side, we can always go buy a cheap fishing rod and catch our own dinner, grill it at east coast park

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Post by EastCoaser » Mon, 30 Jul 2007 9:58 pm

I agree with you this demand is artifically created, mainly by property Agents as they can get more comission.

But the prices will come down as much as they came up.

I hope sooner than later.

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Post by MblSH » Mon, 30 Jul 2007 11:21 pm

With my luck, by that time I'll be just starting another contract with peak prices :D

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Post by renter » Tue, 31 Jul 2007 3:12 pm

Good post by German_Expat. I can't agree more on the current market trend. People who are willing to rent or buy a property now should not add fuel to this property frenzy. But the government really did no good by hiking the GST at the right time!

You reminded me of my German friend who just left in March for S. Africa. Lucky b@sturd left a high renting place to have housing allowances in SA to enjoy the whole apartment for himself. 8-)

Regarding the casino and the recent F1 crap, is the government trying to change Singapore to another Monaco? Are its own people prepared for that kind of country?

In a short time, let's all move outa here~~ :cool: or shift out? :lol:

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Post by keepitreal » Wed, 01 Aug 2007 5:43 am

I have to disagree that this will cool off shortly. They were saying that about London house prices 4 years ago and guess what, Boom! They're still going up and are up on average a further 50% since 2003 - more in other parts of town. At the end of the day, this is simple economics; supply and demand, and until the supply singiifcantly outweighs demand you can expect prices to continue rising. You can blame agents and developers but this is the way the property market works, doesn't matter where you live...

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