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A curb to foreign tenant demand and increase in housing supply

While taking the train to work yesterday, I have no choice but to look at the smartphone screen of a hip Caucasian guy. Apparently he was telling another person that his PR application was not approved and can only work on employment pass.

I find this interesting, as I am not sure the government is paying lip service when they say they will control the migration situation.

I might be bias, but these expats tend to be the ‘more talented’ of the foreign talents. So it was surprising that this was not approved.

On a separate note, a friend recounted that a friend who lives in New Zealand, comes to Singapore applying for PR application. The husband is an accountant with a bank while the wife is a qualified pharmacist. Their application is also rejected and have to go back to New Zealand.

The rules put in place in Aug 2013 states that PR can only buy a resale after staying for 3 years. This dramatically increase the pool demand for rentals.

But if these foreign workers find it unappealing to stay in Singapore for long, the increase in demand could prove a big issue:

Supply of HDB, EC UNITS and Private Residences

In the past 10 years, Singapore has added about 8,000 new private residential units per year. But next year, we can expect about 22,000 units to be completed and 24,000 the year after and at least 16,000 in 2017. The pressure on rents will be overwhelming. Lifting the property curbs will not help fill vacant apartments and improve rents.

The expected supply of new HDB flats and ECs is large as well. More than 25,000 units will be completed every year over the next three years. There are also many second-time new HDB buyers and those who are upgrading to ECs who are required by law to sell their current HDB flats when they collect the keys to their new flats or ECs. Unless a few of the cooling measures are lifted and the foreigner employment policies are relaxed, the HDB Resale Price Index and the URA Residential Price Index are set to decline at a faster pace with the onslaught of new, completed home completions, even after taking into account the need for infrastructure to keep pace with population growth. –Today Online

That is a lot of properties to rent out. We better hope that there isn’t an employment problem in Singapore. The employment is the string that ties everything together. Pull that apart and you have a situation where potentially, you will need to renew your rent drastically.

Kyith

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Disappointed

Friday 26th of September 2014

Hi Kyith, I find this statement racist, "I might be bias, but these expats tend to be the ‘more talented’ of the foreign talents. So it was surprising that this was not approved." You made the judgement based on the race, "Caucasian"." So all other FT are lower than the "Caucasian" lot ya?

This is what I get from your statement. I am surprised that you hold such a view, been a well educated and informed person.

Kyith

Friday 26th of September 2014

Hi disappointed ,

I already state my case that I might be bias here. I was trying to say that amongst the Caucasians , there is likely a larger group that are higher quality. Versus the rest , where there are, but there are also those that are lesser. Its not saying the Caucasians won't have those that are overrated, there are. Its just my observations and my dealings.

sushi_sashimi

Wednesday 24th of September 2014

PR difficult, citizenship easy to apply

Kyith

Wednesday 24th of September 2014

Hi , is that realistic , perhaps you can give an example

PSTan

Monday 22nd of September 2014

Side track abit. If not mistaken, CPF Medisave ceiling had been increased to $48,500. You might want to update your web site.

Kyith

Tuesday 23rd of September 2014

Hi pstan, thanks for letting me know

henry

Monday 22nd of September 2014

Permanent Residency is and should be a stringent process and ultimately the reasons to grant it is entirely up to the authority, despite meeting all the criteria.

This does not affect employment of foreigners. and as such, does not affect rentals of homes etc. If anyone likes to live here, they are most welcomed... as a guest. If they want to stay for good, then they should not be renting.

Jacques

Tuesday 23rd of September 2014

"If they want to stay for good, then they should not be renting."

Why not ? Not everyone is in love with home-ownership. Look at Germany or Switzerland for examples of successful countries where most people prefer renting their home. I know of a German who hold the same view on SG properties, and he's been here a while.

Kyith

Monday 22nd of September 2014

Hi, I beg to differ on that.some would think renting make sense . if you remove a policy that is conducive to eventually gain residence, the determinant of rental hinges on employment .

I guess ultimately jobs is still the biggest string tying all together

Jacques

Monday 22nd of September 2014

Singapore is making it hard to get a PR. Three of our friends just got their rejection letters. All married, SPass holders, applying as families (including two with young boys) good salaries, work respectively in IT/Finance/Strategy. Feels like SG is adopting the Dubai approach, i.e. it's next to impossible for a foreigner to get PR, but work visa's are issued freely on an as needed basis.

Disappointed

Friday 26th of September 2014

Is there anything wrong with making it hard to get PR? Based on your connotation, you seem to imply that foreigners should freely get PR just because they are eligible to apply and meet the criteria for applying. You seem to have developed an "entitlement mentality". I would like to highlight that they are,"eligible" to apply, and its up to the authorities to decide based on their internal criteria. I wonder how many of you will still stay put in Singapore when the economy suffers in Singapore.

Kyith

Monday 22nd of September 2014

Hi Jacques , thanks for sharing.

What are your friends' plans now. I tend to be moderate to the idea that to progress as a nation we really need an upgrade in a lot of areas, but I felt that the real folks who likes it here and felt that they can value add are marginalize by some really bad policies in the past. So now they use a broad stroke to stop all of these.

Best regards,

Kyith

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