BYE SINGAPORE, HELLO MALAYSIA: EXPATS CHASE CHEAPER LIVING COSTS

Mon 05 June 2023:

Lower living costs in cities such as Kuala Lumpur and Ho Chi Minh are attracting some expats away from Singapore.

Singapore – For marketing professional Benedikt Becker, living and working in Singapore had always been “the dream”.

Becker, who landed a job with a marketing agency in Singapore in 2020, thrived on the city-state’s vibrancy as a business hub and enjoyed its efficiency, “impressive” skyline, verdant greenery and architecture. For 2,800 Singapore dollars ($2,072) a month, the German national rented a boutique one-bedroom condo apartment in the east of Singapore, which allowed him to take daily morning walks to the beach.

But as the cost of living became increasingly high, Becker began to reconsider his situation. He noticed that his Grab rides to the office cost 22 to 25 Singapore dollars ($16 to $18), up from 12 to 14 Singapore dollars ($9 to $10) when he first arrived. Friends began reporting that their landlord was bumping up their rent by 20-30 percent.

Singapore’s prime residential market saw rents rise by more than 26 percent in 2022, according to the global real-estate company Savills, more than double the rate of growth in London, Sydney and New York.

In January, the city-state’s government raised the Goods and Services Tax (GST) by 1 percentage point to 8 percent, ahead of a planned hike to 9 percent next year.

Last year, Becker, 33, decided to move to Malaysia’s capital Kuala Lumpur, taking a pay cut to work remotely for a German tech start-up aiming to expand to Southeast Asia.

Since the move, Becker said he has been able to save “so much more.”

Benedikt Becker switched Singapore for Malaysia last year due to the rising cost of living in the city-state [File: Benedikt Becker]

He now rents a room in a co-living space under a flexible rental agreement for 800 Singapore dollars ($592) a month, orders GrabFood for most meals for about 30 Malaysian ringgit ($6.55) and works from various co-working spaces.

“There’s the saying: If you don’t like the rules, you have to change the game… so my move from Singapore to Malaysia was my way of changing the game to keep the cost of living expenses low,” Becker told Al Jazeera.

For now, Becker’s priority, apart from saving money, is to experience other Asian cities such as Bangkok or Ho Chi Minh.

Becker is among a group of expats who have left Singapore for cheaper Southeast Asian cities, propelled by a sharp rise in rents and living costs as the economy bounces back from the COVID-19 pandemic.

While there is no official data on the number of foreign workers leaving Singapore, multinational firms are increasingly looking to move staff out of the city to cut costs, according to recruitment agencies.

There has been a “strong appetite” to relocate staff from Singapore to neighbouring Malaysia due to its location, English-speaking population, lower cost of living and strong presence of back-end office functions, Nic Chambers, the managing director of Michael Page Malaysia, told Al Jazeera.

Southeast Asian cities like Ho Chi Minh are attracting remote workers due to their low cost of living.

While expats have been leaving Singapore due to the high rental and living costs, this is being “offset by large numbers of expats from other regions and a shift to C-suite expats taking advantage of the new Overseas Networks & Expertise (ONE) Pass” – a visa that allows eligible talent to work for multiple companies at once – according to recruitment firm TENTEN Partners.

Operating out of London, Singapore, Hong Kong and opening soon in Dubai, TENTEN Partners’s clients range from mid- to senior-level employees in financial services, fintech and consultancies.

“But B-level executive salaries are often not high enough to persuade candidates to make the move. Instead, we’re placing more expats in the Middle East. Hong Kong is still a tough sell for candidates, with Singapore remaining a more attractive option.”

Those on the margins may feel more likely to be priced out of the Singapore rental market and would reconsider moving here for work, said National University of Singapore business professor Sumit Agarwal, who specialises in finance, real estate and economics.

But while there is some level of outflow, the inflow of expats is comparatively bigger as Singapore is still very much regarded as a “safe haven”, Agarwal told Al Jazeera.

Singapore ranks number one in Asia for attracting and enabling talent according to the INSEAD Global Competitiveness Index 2022, and retains its spot as the most liveable location for expatriates from East Asia in the ECA International 2023 Location Ratings Survey.

Singapore’s Economic Development Board says it expects the city’s rental prices to ease in the coming months.