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What is the home rental market like in Singapore?

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What is the home rental market like in Singapore?

2021-01-29T09:49:05+08:00October 19, 2020|0 Comments

Most Singaporeans live with their family members. They only move out when they get married and settle down with their significant half. Even so, they don’t rent a house, they buy a house (HDB) to live together instead. For this reason, the rental market for locals is relatively low in Singapore as compared to the rest of the world. The demand in the home rental market mainly comes from expatriates living in Singapore. 90% of the market supply of homes available for rent comes from local Singaporean property owners.

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Home rental market

It is expensive to rent an apartment or homes in Singapore. Accommodation expenditures cover almost 40% of household expenditures for most expats. Over the past few years. Singapore has a competitive property market and limited supply of available homes. This phenomenon has caused an increase in rental prices. However, there are many alternatives that foreigners to consider even with above averages home rental prices in Singapore.

Rental Market in Singapore

Options in the Singapore market include semi-detached terrace houses, condominiums, multi-story apartments, or housing development board’s (HDB) public housing. Many factors finalize your types of accommodation, budget is probably the key factor.

The size of homes and location bring variability to availability and rental costs. It is easy to find a single one-bedroom apartment in Singapore. The price is also reasonable as well. However, if you are finding condominiums for the whole family, it will be a bit more challenging.

It is advisable that you leave yourself a flexible range of $2000 to $5000 a month while making a budget for renting in Singapore (no doubt it depends on your requirements).

Area is one of the key factors in deciding the rental price in Singapore. The downtown district of Singapore – orchard road – an almost 1300 sq. foot apartment costs around $5000 for a three-bedroom unit. The prime residential communities with higher prices include Holland Road, Tanglin Road, River Valley, Bukit Timah, East Coast, and Orchard Road. Of course, exceptions do exist. There are regions in Singapore that offer cheaper rental options as well.

The most expensive type of accommodation is semi-detached terraces, bigger apartments, and high-class bungalows, with rental prices quickly falling in the range of $8,000 to $15,000 per month. In contrast, the most affordable option with average rentals is public housing or HBD housing falls in a range of $1500 to $2500 per month. Before signing a lease, we strongly recommend you explore as many options as possible to find the right and best accommodation. Prices change dynamically, so make sure to make yourself up to date to price information before you make the final decision.

Prime districts 9 covering the areas like River Valley, Cairnhill, and Orchard are considered as the most favored rental place in 2018.

Based on URA data, District 9 condos with the highest rental transaction volumes throughout the first 11 months of 2018 are Aspen Heights, Sophia Hills, River gate, OUE Twin Peaks, and UE Square. According to the URA data, three bedded units are the most popular rental unit types in Singapore.

Rental Prices

Due to strict policies of the government of hiring foreign personnel, the rental prices of different districts have been considerably decreased in the last five years.

Districts3-bedroom2-bedroom1-bedroom
9-12%-15%-19%
10-11%-12%-19%
15-11%-16%-18%
19-20%-21%-21%
14-14%-20%-22%

Residency contract

The landlord will prepare the tenancy agreement once the letter of intent is duly signed. The tenant usually bears any incurred legal fee that applies for drawing up of agreement. Legal fees can be exempted if the landlord agree. The use of standard IEA agreement by the landlord’s agent or landlord is usually subtle. After that, your agent ensures unbiasedness and fairness of the tenancy agreement.

Upon signing the Tenancy Agreement, you’ll need to prepare advance rent and rest of the security deposit. One month’s deposit and one month’s advance rental is applied to a year lease. Two months’ deposit and one month’s advance rental are used for a two-year contract. If applicable, you can also exclude good-faith deposit when signing a letter of intent.

When signing the Tenancy Agreement, you should take note of some essential terms.

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E A S I E R • F A S T E R • B E T T E R

Escape and Reimbursement Clause

Always go to check for this clause as it must safeguard you in case of employment lost or transferred to other countries. It will make you able to terminate the lease after 12 months by giving two months’ notice. So that refund of the security deposit will be made to you. If the rent is more than one year even then, most landlords include the Diplomatic clause.

Reimbursement Clause, together with Diplomatic clause us usually seen in the standard Singapore Tenancy Agreement. As per this clause, if you exercise a Diplomatic term, you’ll have to reimburse the commission part with the landlord’s paid to agent.

For two years lease landlord, had paid full one month’s agent commission. If you use a Diplomatic clause to terminate the lease, which means you’re unable to complete two years, refunding pro-rata commission is a compulsion for you. That’s why, along with the Diplomatic clause in the Tenancy Agreement, they usually demand a reimbursement clause.

Telecommunication Provision and Responsibility

Tenants are responsible for the installation charges and monthly bills for the following services

  • SP Services for the water and electricity supply
  • City gas for piped gas in selected areas.
  • Singapore Telecom offers a residential telephone line.
  • Star hub Cable Vision (SCV) for cable television and cable broadband internet

At times tenants can also request the fixed bills to be included as a package in the rental amount.

Rehabilitation cost

Maintenance of leased assertion and carrying out of minor repair at its own cost is the tenant’s responsibility, but with the condition that restoration does not exceed $100 or $150. Normally, it is mentioned in the standard agreement.

If the damage and malfunction of appliances are not resulting in the tenant’s negligence, repair and maintenance cost are high in amount, and then it’ll be the landlord’s responsibility to payout.

Service contracts for items like air conditioning, gardening, pool service, and pest control must be taken up by tenants.

Leasing Amount

Do check the rental amount as the rental amount is divided into:

  • rental of premises
  • rental of furniture and fittings
  • maintenance fees

Always make sure the added rental amount is the same as you agreed.

Stamp Duty

In Singapore, the Inland Revenue Authority of Singapore stamps the Tenancy Agreement for adding value and make it valid. Without stamped by the Inland Revenue Authority of Singapore, it’s of no value. In case of future disputes, only stamped Tenancy Agreement is served as evidence in court. It protects both parties’ interests—usually, tenant borne stamping duty.

Rental Period of 4 years (48 months) or LESS
Total rental x 0.004 (then round down to the nearest dollar )
Example 1a 
Monthly rent is $5,000, Term of the lease being two years (24 months)
Therefore, stamp fee = 5000 x 24 x 0.004 = $480
Example 1b
Monthly rent is $3,888, Term of the lease being three years (36 months)
Therefore, stamp fee = 3888 x 36 x 0.004 = $599.872 = $599 (rounded down)
Rental Period MORE than four years (48 months)
Total rental divided by the number of years (average annual rent)  
Then use the above answer x 0.016  (then round down to the nearest dollar )
Example 2a
Monthly rent is $5,000Term of the lease is five years (60 months)
Calculations:
5000 x 60 / 5 = 60000
60000 x 0.016 = $960
Stamp fee = $960
Example 2b
Monthly rent is $3,888
The term of lease is 6 years (72 months)
Calculations:
3888 x 72 / 6 = 46656
46656 x 0.016 = $746.496
Stamp fee = $746 (rounded down)

What is the home rental market like in Singapore? FAQs

What are the most popular rental unit type in Singapore?2020-10-19T16:16:46+08:00

The most popular rental unit types in Singapore are 3-bedroom unit, followed by 2-bedrooms & 1-bedroom unit. 

Where are the popular areas to rent a home in Singapore?2020-10-19T16:16:22+08:00

River Valley, Cairnhill, and Orchard. 

Are lease terms flexible in Singapore?2020-10-19T16:15:59+08:00

It depends on the option that you pick. If you have a juicy budget and you are only staying in Singapore for a short amount of time, renting a serviced apartment might work the best for you. Generally, lease terms of a serviced apartment are flexible – you can negotiate for a per-day basis, per-week basis, or on a per-month basis.  

Is there any family-friendly condo home rental in Singapore?2020-10-19T16:12:02+08:00

There are many family-friendly condos in Singapore. Watten Hill, Tanglin Park, and Draycott 8 are among the famous options for expats who are looking for family-friendly condo. 

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