Expatriates in Singapore are often envied for their generous pay packets, but, facing the prospect of salary cuts as the coronavirus batters businesses, some are tightening their belts and asking for lower rent.
Real estate agent Clarence Foo of Apac Realty unit ERA has come across seven such cases over the past month – the highest number of requests he has received in his seven-year career. Four were successful.
One was an American woman who texted Mr Foo last week. In her message, she said she had just been informed about a 20 per cent drop in pay effective from May 1 to July 31, after which her employer will reassess the firm’s financial health.
The executive, in her 30s, is leasing a one-bedroom unit in Tanjong Pagar, near the financial district, for $3,400 a month. She got a rent reduction of $250 a month, or around 7 per cent. “At first glance, it isn’t a lot. But over three months, the duration of her pay cut, it’s a substantial saving,” Mr Foo said.
Singapore is expected to sink into a deep recession this year as it extends a partial shutdown, now into its fifth week. Wages will take a bigger hit than jobs as businesses try to cut costs in an economy bracing itself for a sharp contraction, the central bank said last month.
While the Government has unveiled a range of support measures, most are aimed at Singapore citizens. More than $7 billion was paid out to employers last month to co-fund the wages of over 1.9 million local workers, Manpower Minister Josephine Teo said earlier this week.
Singapore has one of the world’s most expensive property markets. Residential rents surged to a three-year high last year, with prices boosted by strong overseas demand.
Mr Lester Chen is another real estate agent dealing with rent reduction requests from expats. One, living in an apartment in Sentosa Cove, managed to get his rent lowered by 20 per cent.
Some landlords hold out because the types of apartments they own are in short supply or because that rental income goes towards paying their own mortgages.
For those who do acquiesce, they are often “willing to close one eye because at least they get some income instead of ending up empty-handed”, said Mr Chen, from Singapore Realtors Inc.
Not always, though. Last month, a British man asked for 50 per cent reduction on his two-bedroom inner city apartment, which costs $8,000 a month. “The landlord was shocked,” Mr Chen said. “There’s no way he’s going to accept such a steep cut.”
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