‘Quality, not cost will drive expats from Singapore’

By Andrew Batt (courtesy of PropertyGuru)

Singapore is becoming a less attractive destination for expatriates, if a headline in one of Tuesday's British broadsheet newspapers is anything to go by.

Mentioning the "triple whammy" of the foreign property buying tax, the scrapping of the scheme which allowed graduates from overseas universities to stay in Singapore for a year to look for work, and the fact the city state has now overtaken Hong Kong (for the first time in ten years) in a 'most expensive place to stay' report by ECA International, the article suggested expatriates will be shunning the city state.

But while Singapore is now the sixth costliest city in Asia (Tokyo tops the list and Hong Kong has dropped to a lowly ninth place); its rise in these reports has been matched by rises in Quality of Living surveys. Singapore was ranked eighth in Asia and 25th overall in Mercer's 2011 Quality of Living survey, ahead of Tokyo, Hong Kong, and regional "rivals" Kuala Lumpur, Jakarta and Bangkok.

For expats, and their employers, wanting a safe and secure city in South East Asia, everything is still pointing very positively towards Singapore. I cannot see an exodus of foreigners just because of the so-called triple whammy, and least of all because of last week's property price tax implementation.

Perhaps one area that is being overlooked in many media commentaries right now is the inevitable rise in rental prices which will be seen in Singapore, driven by those expats who might have previously opted to buy. This may well have the unintended impact of driving up rental prices quite quickly — even away from the higher end of the market.

Of course the latest property cooling measures will make overseas investors think twice, but for those expatriates who have no choice about where they work, a home is almost at the top of the to-do list before they even set foot here.

Companies still view Singapore as the centre of South East Asia and the place to be when it comes to business. That will not change anytime soon. If the costs of doing business here rise, then guess what, the costs of the products and services provided by those businesses will also rise.

But one thing is for sure. Singapore will not become any less popular for expats and their employers overnight. There are many, many reasons why this is the place to be.

Andrew Batt is regional group editor for PropertyGuru.