The cost of living near Singapore’s international schools

In its recent annual cost-of-living survey, global human resources consulting firm Mercer ranked Singapore as the fourth-most expensive city in the world for expatriates and the second-most expensive in Asia.

A large chunk of an expat’s household budget goes to schools and housing. An international school can cost tens of thousands of dollars a year, while the rent to house a family of a mid-level manager can amount to more than S$10,000 a month.

In the past, corporations defrayed much of these costs, providing expat families with school and housing allowances. International schools and landlords were the big beneficiaries of these generous allowances. In many cases, the host company paid the full tuition and rent directly to the school and the landlord.

Landlords were delighted to win these deals because a typical contract was with the tenant’s company, which essentially guaranteed that rent was paid on time and in full. However, during the global financial crisis, this practice changed. Many companies in Singapore did away with the generous expat packages and put their foreign employees on local terms. This means that more and more expats are now paying for housing and schools out-of-pocket.

The result is that expats are becoming more cost-conscious, now that it is their money going towards housing and schools. This is bad news for landlords and international schools, but good news for those looking for homes near these schools now that rents and prices are under pressure.

In an earlier commentary in TODAY (“Rents in affluent areas suffer from outward migration”), I showed that expats had been moving further away from the Core Central Region in search of lower rents. The Singapore Real Estate Exchange (SRX) Price Index for Non-landed Rentals showed that rents in July had fallen 7.3 per cent from their peak of January last year. This is a 38-month low since May 2011.

The prices and rents of homes near international schools vary from very expensive to reasonable. The SRX monitors the cost of renting and buying in neighbourhoods within 2km of 56 Singapore international schools, and the data can be found at http://srx.com.sg/singapore-international-schools.

The category leaders for sale and rental price per square foot (psf) are shown here. As you can see from the table, Insworld is located in the most expensive neighbourhood for buying or renting a landed home. It will cost you more than S$3 million per 1,000 sqf of land to buy there.

As for the private condominiums, the most expensive area to buy is near the Norwegian Supplementary School. Within 2km, the median transacted price is about S$1.8 million per 1,000sqf.

It will cost you close to S$5,000 per 1,000 sqf to rent near Eton House International School at Outram, making this the most expensive neighbourhood for renting a home near an international school.

The least expensive neighbourhoods to rent or buy (in certain property types) are near Chatsworth Kindergarten in District 28, One World International School in District 16, and Singapore American School in Woodlands (District 25).

Sam Baker is co-founder of SRX, an information exchange formed by leading real estate agencies in Singapore to disseminate market pricing information and facilitate property transactions.