For many individuals, renting a home offers many benefits compared to owning. First of all, renting is often cheaper in the short-term as it does not require a downpayment. Additionally, it provides added financial flexibility because individuals are not locked into a long-term commitment in the form of a mortgage. According to a recent report by Deutsche Bank, the average monthly rent for a 2-bedroom home in Singapore is about S$2,500. That made us wonder: how much does S$2,500 get renters across the world?
What Type of Flats Are Available in Singapore for S$2,500?
With a budget of S$2,500 Renters in Singapore will be available to choose from a range of flats. For example, a variety of condos and HDB flats are listed across the island for S$2,500 or less. However, this amount of money will get you further in some areas compared to others. While the median rental price of a 5-room or Executive HDB flat in many neighbourhoods is actually lower than S$2,500, in other districts the median rental price of a 4-room flat actually exceeds this rate. Our research suggests that renters can find larger and newer flats further from the city center, for the same price as those that are closer to Singapore's downtown.
Rental Prices in Many Major Cities Greatly Exceeds S$2,500
While Singapore is certainly an expensive place to live, other major cities are actually much more expensive. The bar chart below shows the median price of a 2-bedroom apartment by major cities around the world. The median prices in San Francisco and Hong Kong are nearly twice as much as in Singapore.
According to our research S$2,500 (or about $1,800) is not even enough to rent a 1-bedroom apartment in many major cities. For example, based on listings on Zillow, New York City renters would have to live in a small studio apartment, in one of Manhattan's more distance neighbourhoods or an outer borough (i.e. the Bronx, Queens, Brooklyn or Staten Island) to stay under this budget. This suggests that Singapore's rental market may be more affordable than those of other major international cities.
How to Cut Housing Costs as a Renter
While Singapore may not be the most expensive city for renters, S$2,500 is still far more than many could even afford to pay in rent each month. Therefore, we thought it would be helpful to outline some tips for those looking to make their flat rental even more affordable.
Don't Be Afraid to Negotiate with Your Landlord
While it may seem like your landlord has all the power, many renters would be surprised that they can actually obtain cheaper rent just by negotiating at the beginning or end of a lease. Because landlords are incentivised to keep their properties occupied with paying tenants, renters may be able to negotiate for slightly lower monthly rates. This is especially true for those that have great track records of paying on-time and not creating any other problems for their landlord.
Get the Most Out of Your Insurance
For those renters that currently have home insurance, or would consider signing up, it is important to compare plans. For example, the best home insurance policies for renters are 15-30% cheaper than the market average. Therefore, researching the top home insurance policies can actually save renters a decent amount of money each year.
Shop Around for Cheaper Electricity
If your lease stipulates that you must cover utilities, such as electricity, it makes sense to find ways to cut your electricity bill. Depending on your individual situation, it may be possible to find a more affordable electricity provider. For example, our research has found that households can save as much as S$50 a month or S$300 annually, just by switching from SP Group to one of the cheaper retailers available on the Open Electricity Market (OEM).