Coronavirus has been rapidly spreading for months now. Due to thorough lockdown, several countries are facing severe economic backlash. Singapore, being one of such places, is encountering the odds of salary reduction. For this reason, the expats of Singapore are compelled to ask for lower rents.
One of the real estate agents at APAC Realty unit ERA, Mr. Clarence Foo has reported as much as seven cases till date. He confirmed that in his entire career, this had been the highest number of requests for rent discounts.
He laid the instance of an American woman who contacted him informing that there would be a 20 percent plunge in her income which is decided to extend from May 1 till July 31.
In her 30s, the executive is renting out a one-bedroom apartment in Tanjong Pagar, located around Singapore’s financial district, for $3,400 per month. A rent reduction of $250 per month has also been approved. According to Mr. Foo, probably this 7 percent deduction doesn’t seem to be a lot initially. But calculating in terms of three months, it is definitely quite a decent saving.
Currently, Singapore is in its fifth week of lockdown. Since the situation is quite hazardous, partial lockdown is presumed to be extended. Also, Singapore is likely to sink into a deep recession this year. According to the words of the central bank last month, this sudden slump will cause a drastic effect on jobs as businesses are trying to cut expenses rapidly.
Various support measures have been imposed by the Government, most of which are aimed at Singapore citizens. Manpower Minister, Josephine Teo reported that in order to co-fund the salaries of more than 1.9 million daily workers, an amount of $7 billion was already paid out to employers in the month of April. In order to provide a helping hand so that the firms can meet the commitments to foreign employees, tariff waivers and rebates have also been procured.
Singapore is blessed with one of the world’s most valuable property markets. As announced last year, residential rents have escalated to a three-year high, while the locational value has boosted by dominant overseas demand. Generally, people migrating from overseas is more dependant on rental markets than the local citizens. This is mainly because of the fact that there is a high rate of ownership available for local homes; approximately 80 percent of Singapore citizens settle in Housing Board flats rather in private apartments.
Mr. Lester Chen, another of the real estate agents informed that he has also been receiving requests from expats for reduction of rent. A person residing in an apartment in Sentosa Cove, an island off Singapore’s south coast, has been facing similar salary reduction issues and has succeeded in getting approved of a 20 percent rent rebate.
However, another landlord was left shocked when his British tenant requested a 50 percent rent reduction on his two-bedroom lodging that costs $8,000 a month.
There are also instances of the other kinds of land-owners who are themselves paying their own land mortgage out of their rental incomes. However, their apartments are short in supply and hence, having no other options, they are holding out.
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