Can Hong Kong’s ex-pats boost Singapore’s rental leasing volume?

Private residential transactions have dropped 1.9% QoQ in 2Q23.

Global economic headwinds and high rents are not the only factors that can affect the residential leasing activity in Singapore.

According to Savills, the market’s performance also hinges on whether there will be a further influx of expatriates from Hong Kong to Singapore.

Savills reported that some ex-pats have begun relocating to Singapore since the removal of the mandatory quarantine for arrivals in September 2022 and the opening of borders with China in early January 2023.

“We are sensing that another wave of Hong Kong-based expatriates, albeit small, are either relocating or starting to relocate to Singapore,” Savills added.

“We believe that in the absence of any strong global economic recovery, Hong Kong will be the determining factor behind future rental performance,” Savills added.

The real estate expert said Hong Kong expats may also affect rents in Singapore.

“For certain CCR (Core Central Region) non-landed projects, we may experience
rental volatility because of some inflow from Hong Kong expatriates who hold positions a rung below the C-suite level. These have a sizeable rental budget.” Savills said.

“Native Hong Kong nationals are more cost-conscious and could accept smaller apartment sizes and even single room lettings. For this, the new supply this year in the OCR and RCR will be able to meet their needs,” the expert added.

Generally, Savills believes that rents in Singapore have reached a cruising altitude.

“The overall rental market is likely to stay at this level with some negative bias until the end of the year. The reason for that slight bias is that the market will likely discover a level of inelasticity about 5% below where rents are now,” Savills reported.