Written By: Hannah Grey
While many industries have been hit hard when the pandemic reached our shores early last year, the local rental market and property industry managed to stay afloat and proved to be quite resilient amidst this unique global crisis.
While this sounds like good news for real estate developers and service providers like Ohmyhome, it presents a real threat to homebuyers as property prices are expected to surge in the coming years. The reason for this? The influx of big tech companies entering Singapore.
The rise in global innovators flocking to Singapore
Singapore could be Asia’s Silicon Valley, with 80% of the world’s top 100 tech firms setting up their beachhead in the city-state.
Last year alone, several up and coming tech giants announced their relocation plans to set up their headquarters in the Lion City as green lanes reopened for international business. Each of these tech giants easily grows to a headcount of above 2000 employees.
Leading the pack is TikTok’s parent company, ByteDance, who is leveraging Singapore’s strategic location to catapult their business to the rest of Asia. Despite having only established the video-sharing networking service in 2016, TikTok already has over 400 workers employed in their sales, marketing, and tech departments with more than 200 job openings listed on their site.
Chinese tech giant Tencent Holdings will also be building their regional hub to refocus their expansion efforts in Singapore and the rest of the region. To kick start their operations, there are over 100 jobs positions open on their job referral site.
Following the rise of remote working, cloud-based video conferencing service Zoom opened a data centre in August 2020. It is actively hiring local talents for positions in their software and data engineering, data science, and product departments.
But there are already a number of established businesses present in the country, including industry giants like Google, Alibaba, Grab, SEA and even PayPal.
Based on a report by the Economic Development Board (EDB) of Singapore, 80% of the world’s top 100 tech firms have a regional headquarter in Singapore, proving that it could be Asia’s Silicon Valley.
Why tech giants are moving to Singapore during the pandemic
Singapore’s strategic geographical location has become increasingly attractive among modern business owners across the globe.
Relocating your business during a pandemic sounds like an incredibly risky move. But for companies in the tech industry, it makes absolute sense. Year after year, Singapore is recognised as one of the best countries for business, not just in the region, but also the entire world.
This is due to a plethora of reasons,the most obvious one being its strategic geographical location. It is only a six-hour flight time radius from any other country in the Southeast Asian region. Other crucial factors, such as Singapore’s competitive economy, politically-stable environment, and business-friendly corporate tax rates have also become increasingly attractive among modern business owners across the globe.
While this will certainly lead to increased competition in such a diverse talent pool, it will also bring the tech field’s growth to greater heights-ultimately benefiting the ecosystem and industry at large. No one in the right mind would want to miss out on an opportunity to be a part of something as groundbreaking as this.
Besides the wide array of possibilities for businesses, we cannot disregard the local government’s effective Covid-19 response, which also plays a crucial part in attracting foreign talents and investors. With a near Covid-free Singapore insight thanks to the vaccine, it is no question why it is an ideal destination for many, especially tech companies.
How Silicon Valley’s property crisis can occur in Singapore
Silicon Valley’s vibrant culture and economy continue to attract young professionals, driving the region’s demand for suburban properties.
Establishing your regional headquarters to an entirely different country also means taking your teams with you and hiring more talents-both locally and internationally. With more employees moving into the city-state, more foreign individuals are likely to invest in real estate, driving demand in the rental market. Unlike the Chinese and Americans with a much larger and diverse pool of talents to choose from, Singapore relies heavily on bringing foreigners into the country to bolster its various industries.
Take a look at the Silicon Valley property crisis, for instance.
When the pandemic hit the bay area, property prices were projected to drop drastically. With remote work being the ‘new normal’, many expected individuals to move away from the area and smaller cities. However, Silicon Valley’s vibrant culture and economy continue to attract young professionals, driving the region’s demand for suburban properties.
Seeing that Singapore is headed in a similar direction, we may see the same happening right here on our shores. The government has always been supportive of foreign companies incorporating their businesses in the country and has shown no signs of stopping in the near future.
Singapore introduces new Tech.Pass scheme to boost startup culture
In January 2021, EDB and Enterprise Singapore announced the launch of the Tech.Pass scheme, which aims to grow the country’s technology ecosystem and global presence. This visa will allow “established tech entrepreneurs, leaders, or technical experts from around the world to come to Singapore to perform frontier and disruptive innovations”.
Through the Tech.Pass scheme, global tech giants can seamlessly establish their headquarters in Singapore and hire foreign talent with ease despite the ongoing travel restrictions. Considering their potential influence on economic growth, employment rates, and even rental rates, those in the technology sector will have a much easier time hiring compared to other industries.
What does this mean for the local rental market?
With all of these changes and developments in our current business climate, it is safe to say that property prices will definitely be going up in the foreseeable future. Since the pandemic and circuit breaker restrictions have left detrimental impacts on the home rental market, Singapore will be relying heavily on foreign professionals to make up for the loss incurred in 2020.
Despite the monetary payouts given to Singaporeans and specific measures to boost the economy, whether it will be enough to bolster this impact is still in question.
However, there are still multiple avenues to search for affordable rentals despite the increased demand in the local market.
Speak to a Super Agent today
Here at Ohmyhome, we streamline the house-hunting process and filter out the best rental options in Singapore according to your needs and preferences. We do the work, so you don’t have to.