Rental hikes force 20% rise in expats'
allowance
Mon, Aug 06, 2007
AsiaOne
Singapore's soaring property market and supply crunch has forced
employers to raise the housing allowances for expatriates by as
much as 20 per cent.
And this is causing concern as it could raise the cost of doing business
here, and compromise Singapore's
competitiveness.
According to a recent study by real estate consultancy Savills
Singapore, average apartment rentals in the prime districts of 9,
10 and 11 have jumped by 36 per cent in a year.
Residential property prices in prime districts - where senior
executives were most likely to live - rose 25.4 per cent last
year.
Islandwide, home rentals climbed 10 per cent last
year.
The American Chamber of Commerce's annual Asean Business Outlook
poll found that 61 per cent of the 95 senior executives in
Singapore surveyed were dissatisfied with housing prices, The
Straits Times reported today.
The trend is not unique to Singapore, however. Housing rentals have
also been rising in other global cities such as Hong Kong.
Recruitment consultants that The Straits Times spoke to said some
companies are responding to the changes by adjusting the allowances
that their expatriate employees get.
While the allowances vary across industries, estimates indicate
that they have risen by about 20 per cent.
Some figures cited:
A chief executive officer who previously received between $10,000
and $20,000 in allowance per month would now get as much as $12,000
to $24,000 a month.
A vice-president or regional head who was entitled to between
$8,000 and $15,000 a month would now get a new allowance of between
$9,600 and $18,000.
With an increasing trend for companies to give their employees a
lump-sum package that covers housing, it is mainly senior
executives who still get a separate housing allowance.
Mr Charles Moore, managing partner at recruiting company Heidrick
and Struggles, said: 'The revisions have been mostly market-led,
rising from 15 per cent all the way to 100 per cent, according to
the new rentals.'
But there are still companies which have yet to revise their
allowances - although it looks like there is growing pressure on
them to respond.
Feedback from the expatriate community has led the American Chamber
of Commerce to consider urging companies to make changes.
