Malaysian financial executive Ron Tan wasted no time in renewing his lease for a three-bedroom apartment in Singapore when his landlord decided to raise the monthly rent by 300 Singapore dollars (199 US).
"I see no point in haggling. The way the market is right now, I think my landlord is very reasonable," said Tan, who counts himself among the lucky few to escape the pain of a red hot property market. Other foreign executives have no such luck as they find themselves hit with rents that have increased by as much as 50 percent, or more, amid a property boom in the city-state.
At the Bayshore Park condominium, popular with foreigners because of its closeness to the beach, monthly rents for a two-bedroom unit have doubled to 2,800 dollars from a year ago. "The owners are getting greedy. It's really a landlord's market right now," said a property agent who wanted to be identified only as May.
Singapore is now the eighth most pricey city in Asia in terms of housing costs for expatriates, according to global human resources firm ECA International. The firm's latest survey of global accommodation costs showed rents for a three-bedroom apartment in residential areas popular with expatriates jumped 15 percent from 2005 to an average 5,113 dollars a month last year.
Fuelling the rental boom is the huge influx of foreigners into the Southeast Asian state as the government seeks to recruit more skilled professionals to augment its local workforce.
Foreigners currently make up 18 percent of Singapore's 4.4 million population. The government is planning for a population of 6.5 million over the next 50 years and experts say the bulk of the additional two million people will come from abroad.
Singapore's robust economy is also a factor behind the current rental spike with more multinational companies (MNCs) relocating staff to the city-state, which serves as their regional headquarters, observers say.
"Basically if we look at the causes of this, a lot of it is being driven by demand," Lee Quane, general manager of ECA International, told AFP. "The economy in Singapore is doing very well. MNCs are expanding their operations and are bringing in more expatriates," he said.
Global property consultancy Savills expects the rental crunch to worsen with more foreigners expected to arrive as the government seeks to further entrench the city-state's status as a regional business hub.
"We expect the rental market to continue to perform well. The number of foreigners is expected to increase with the expansion of companies as well as the increasing number of new firms, especially from the financial sector," Savills said.
Despite the massive rental hikes, recruitment specialists do not expect Singapore to surrender its cost advantage over arch economic rival Hong Kong any time soon.
The southern Chinese territory is still the world's most expensive city in which to rent a three-bedroom apartment and living costs are generally regarded as higher than in Singapore.
"Rentals have also risen in Hong Kong and it is generally accepted to be a city that has a higher cost of living versus Singapore so the differential still exists," said Mark Ellwood, a director with recruitment firm Robert Walters.
For foreign executives or companies planning to relocate staff to the region, accommodation cost is not the only factor taken into account, said Ellwood. "From our perspective, we are not seeing this as a reason for people to relocate either as individuals or as corporates.
"It's a consideration but it isn't the major driving factor and Singapore is very much an attractive city for people to live and work and for organisations to headquarter into." Hong Kong's worsening pollution has also worked to Singapore's advantage, said Ellwood.
"What we are experiencing more and more is that many people, particularly with young families, would like to relocate from Hong Kong to Singapore because they perceive Singapore to be a cleaner city and they are concerned about the levels of pollution in Hong Kong especially if they have young children," he said.
However, Lee Kuan Yew, Singapore's founding father widely credited with transforming the former tropical backwater into a thriving business hub, expressed concern the upswing in property prices could erode the city-state's competitive edge. "We must check this spike in rents for office and residential space or we will lose our competitiveness," Lee, 83, was quoted as saying in the Sunday Times.
He said Singapore "must not allow our rents to shoot up as in Hong Kong".