Rent drop culprit: A different foreign worker profile

Even though the number of foreign workers continues to rise, a change in the group’s make up has resulted in steep rent declines, property agents said.

“We are seeing more foreigners looking to rent,” Land Vista Property Network agent Kelly Tang Robinson told CNBC. “There’s almost like zero relocation here (among bankers),” she said. Workers from the financial sector are traditionally well-paid. Expatriates of today typically come from pharmaceutical and chemical sectors, she added.

“They’re from everywhere,” quipped Mr Chandran V.R., managing director at Cosmopolitan Real Estate, who observed a drop in clients with relocation benefits that included paid housing.

Banks in Singapore have been cutting back on foreigners and are hiring locals instead, said Mr Satish Bakhda, chief operations officer at Rikvin Singapore, which helps companies start branches and obtain work permits in the city-state.

“With the banking economy not doing so well, it’s better to use locals as they have to pay more for foreigners,” he explained.

Established banks such as Barclays and Nomura have been laying off staff globally, spurred by a bleak economic climate. Some of these cuts have hit Singapore’s financial sector.

Foreign worker numbers, excluding domestic helpers, increased by more than 22,000 last year, according to the Ministry of Manpower. It declined to give further details on professions and salaries.

Mr Bakha believes that many of these new work permits were granted to “S Pass” employees, who earn at least $2,200 a month, instead of “employment pass” workers who make a minimum of $3,300.

Rents have dropped by 10 per cent since 2013, official statistics showed. By the end of the year, 20,000 more private homes will be completed. A total of 15,000 are set to be completed in 2017.

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