Tuesday, January 22, 2008

Is Singapore becoming price uncompetitive for foreign business? Rocketing office and housing rental prices over the last 12 months

Is Singapore becoming price uncompetitive for foreign business? Rocketing office and housing rental prices over the last 12 months are raising this question.
With property costs now among the highest in East Asia after Tokyo and Hong Kong, there is more and more talk as to what impact they must now make on decisions by a foreign company to maintain or establish in the island city state. Various surveys of the foreign corporate sector and expatriate professionals by consulting companies underline the extent of Singapores rising property and living costs. International human resource consultant, Mercer, found in its annual cost-of-living survey for expatriates earlier this year that Singapore had risen to become the 14th most expensive city of 50 cities around the world, from 17th place the year before, and the most expensive in Asia after Seoul, Tokyo and Hong Kong.

New York, Sydney, Beijing and Shanghai were all below Singapore. And since the Mercer survey, announced in March, living costs have continued to rise in Singapore. Yet these cost-of-living headlines can still skew a true assessment of Singapore´s international economic competitiveness.

Income taxes are very low - 20 per cent in the top bracket - and there was a further cut in this year´s February budget in the corporate rate to 18 per cent. Singapore continues to be advantaged by efficient and low-cost infrastructure services, a well-educated workforce, English as the common language in business and government, and legal and regulatory certainty and transparency for commerce.

Setting up a foreign-invested company, including a fully-foreign-owned company, even if the sponsors are only small-scale businesses, is a very straightforward and rapid process, unlike almost anywhere else in Asia. These factors will continue to offset cost-ofliving rises for top-end foreign business - that is, those in the international banking, legal and business services, and high value R&D heavy manufacturing, such as biotechnology and pharmaceuticals, precision engineering and the sophisticated end of electronics and information technology.

And there is no question that Singapore is succeeding here, with growth of 7.9 per cent in 2006 and an anticipated 7.0 per cent in 2007, driven significantly by these industries, as well as (more recently) construction in response to property demand. Activity in construction is the highest for a decade, according to the Ministry of Trade and Industry. One effect of the higher living costs, though, may be to limit expatriate staff to the top executive level with more reliance on local professional and technical staff for mid-level positions as they will not want the higher salaries their equivalent foreign number would need to live on a temporary basis in Singapore.

The property market is the major driver of these rising living costs. While this is due to an obvious imbalance in supply and demand, the boom is also a result of the Singapore Government´s efforts to develop high-end economic sectors and industries, and the impact, then, on rental and office markets of new foreign companies establishing and expanding. To cool the market, the Government is now releasing more land and putting in place other measures, such as slowing the rate at which developers can pull down older midlevel- priced apartments to build high-end ones.

High property prices are also being felt by local Singaporeans and not simply in terms of owners and developers gaining from the boom Price increases in the private-condominium segment filter down to the public housing segment where the vast majority of Singaporeans live some 80 per cent and this impacts adversely on those lower- and middle-income households that rent, or are in the market to purchase an apartment. Combined with the overall economic restructuring taking place, this leaves significant numbers of Singaporeans vulnerable and hurting, especially the old and those lacking skills and education.

The problem of a widening income gap is something that the ruling Peoples Action Party does not deny, and how the Government intends to combat it through education and training measures, income support and housing estate renewal was a focus of Prime Minister Lee Hsien Loong´s National Day speech in August. But the question of social inequalities will continue to be a major issue for the Government in the years ahead, especially in the context of what seems a strategy of making the island city a base in the region for the worlds wealthy.

Inevitably there is the risk of social jealousies and resentment. Nowhere is this clearer than in the finance and banking sector. Singapore´s drive to become a larger international financial centre has led to increasing emphasis on private banking. And, with this has come upward pressure on the property market through an associated interest by wealthy foreign individuals and families with investments managed by Singaporebased private banks to purchase real estate and spend time living on the island state. One example is Charoen Sirivadhanabhakdi, one of Thailand´s richest men, who listed his whisky and beer firm Thai Beverage on the Singpopore exchange in 2006.

According to the local Business Times newspaper, in April this year be bought 47 of 48 flats in a new development for US$140 million, and four entire floors in another project for US$90 million.

Singapore aspires to be a Switzerland of Asia. There are now nearly 40 private banks with regional operations in Singapore. Both US Citigroup and UKs Standard Chartered maintain their headquarters for all private banking outside of their home countries in Singapore. Target clients range from the European and American wealthy to those in East Asia and India, the new millionaires of China, and the oil rich of the Middle East, who are turning more to East Asia as a place to invest since 9/11 and the Iraq war.

Singapore´s own rich should also not be forgotten, with the small State having more millionaire households as a percentage of total households than any other Asian economy, according to the Boston Consulting Group. Singapore, as has long been the case, argues its ability to act as a platform to manage investment throughout the region and beyond. More particularly, to encourage private banking, the Government has strengthened bank secrecy laws and tax incentives. For example, there is no taxation on an individual´s foreign income, including capital gains and interest income in Singapore.

Income tax is levied only on income earned from Singapore, and this tax is very low. Another factor helping growth of private banking is attractive trust laws. Other finance industry segments that are being encouraged along with the more traditional banking and stock market services are hedge funds, private equity firms and insurers. Overall, the finance sector is one of the strongest areas of the economy, growing by 17 per cent in the second quarter of 2007 on top of 14 per cent in the first quarter. And, as the Ministry of Trade and Industry notes in the release of these results, the wealth advisory cluster remained buoyant, riding on growing affluence in the region and continued demand domestically for professional fund management services.

Encouragement of private banking meshes with the Government´s new urban and tourist development thrusts, as well as promotion of Singapore as a world-class education centre. Thus, Singapore is not just a place in which to invest, live and play Singapore also can offer the best of education for their children. Evidence of this can be seen at the end of Sentosa Island, on Singapore´s inner west coast, not far from the CBD. Sentosa, better known to tourists as a theme park and once a British military base, is now being transformed into an exclusive residential estate.

Sites at what is called Sentosa Cove are reported to be selling from as much as US$9.9 million.

Sentosa Cove has a 400-berth marina with 10 spots for very large yachts, and two golf courses.

About 60 per cent of buyers at Sentosa Cove are foreigners. Sentosa will also feature one of Singapore´s two new casinos called integrated resorts being developed by the Government after a four decade ban and despite considerable community concern over their possible adverse social effects. Sentosas will be built and operated by Malaysia´s Genting group, while the other will be build by Las Vegas Sands of the US at the emerging Marina Bay office, hotel, exhibition and convention centre on reclaimed land opposite the core CBD. As one property agent told Reuters: “Its Monaco in the tropics.”
Source : Asia Today International - 18 Jan 2008

45 comments:

Smartphone said...

Hello. This post is likeable, and your blog is very interesting, congratulations :-). I will add in my blogroll =). If possible gives a last there on my blog, it is about the Smartphone, I hope you enjoy. The address is http://smartphone-brasil.blogspot.com. A hug.

jay said...

I haven’t tried flipping sites yet but this sounds like a good idea...
thanks..

Property investment information, advice

kat said...

Hi,

Good one on Housing Rental. If you are looking for corporate housing rentals it doesn't matter if you are a corporate and searching for rental or properties or you own a property and looking to rent out http://tchnetwork.com/blog/ can help. Their service is amazing.

Thanks,
kim

EddieBrogan said...

情色短片下載情色短片線上觀看情色短片性感遊戲短片性愛激情短片成人短片熟女成人短片網址大全成人短片線上成人短片區成人短片分享區成人短片免費下載成人短片免費試看成人短片免費觀看成人短片免費成人短片試看區做愛長時間好嗎做愛花樣女郎做愛肢體做愛空姐做愛直播做愛姿勢技巧做愛姿勢持九做愛姿勢書做愛射精自拍做愛套餐做愛俱樂部做愛要怎樣才能持久做愛為啥會呻吟做愛為何會有水做愛流程法視訊主持人視訊一對一視訊一對多視訊正妹影片視訊正妹視訊交友cleansing視訊交友cyy視訊交友網站視訊激情網愛視訊交流視訊交朋友視訊交換視訊交友愛戀之視訊交友平台視訊交友做愛免費

自由 said...

77p2p影片區hi5 tv 免費影片xxx383美女寫真aa一夜情台中援交妹視訊甜心寶貝直播貼片av成人網g8mm 視訊壞朋友論壇視訊美女msvt中部人聊天室視訊網愛聊天室網路援交168論壇辣妹貼圖新竹援交38ga片下載全國最大俱樂部豆豆聊天室1007視訊xvideo打飛機專用網哈尼視訊援交友aio34c蒼井空影片下載avdvd69性殿dodo豆豆聊天室色美眉部落格 2,視訊主播脫衣秀台南視訊月宮貼圖情趣 商品拓網交友-情色視訊拓網交友情色視訊免費視訊美女,情人視訊網自拍線上av免費影片線上免費av影片咆哮小老鼠專區一葉情貼影禁區kiss168一葉情貼影色影cu成人bt色站girl5320cu成人bt色片

法榮 said...

I love readding, and thanks for your artical...................................................

羅昆珍 said...

看到你的好文章真是開心 加油囉.......................................

長宜芳修 said...

I do like ur article~!!!...................................................

友辰 said...

笑話精華~輕鬆一下~
孫悟空為什麼能大鬧天宮,而打不過諸多妖精?
哭笑不得的十二件事
浪漫一點行不行
校園尷尬事件大全(爆笑)
校園寢室騷擾電話

NicolaSigel0508 said...

分享笑話三則~
唐僧徵婚
原來還是個母鷹
俺的愛人不是豬

IdellA231_Fecteau1 said...

與朋友在一起,分擔的痛苦是減半的痛苦,分享的快樂是加倍的快樂。..................................................

wilfredkdefilippo236 said...

Circumstances are the rulers of the weak, instrument of the wise.........................................

RonnyLitchfie6521 said...

目標是什麼不重要,目標能產生什麼樣的效果才重要........................................

志名 said...

量力而為,別勉強了,Cut your coat according to your cloth..............................................

DianneG_Conatser家銘 said...

當一個人內心能容納兩樣相互衝突的東西,這個人便開始變得有價值了。.........................

VincenzoJ詩婷 said...

向小善致敬,它使人生旅程較為平順。.............................................

韋于倫成 said...

天可補,海可填,南山可移,日月既往,不可復追。......................................................

佩GailBohanan1蓉 said...

Knowledge is power.............................................................

batesda said...

Hello,這裡真是百看不厭的部落格........................................

亦妮亦妮 said...

任何你憂慮的事,你都應該去採取一點行動,不要只是在那邊想......................................................................

禎峰 said...

支持你!!!期待你的更新!!!相信一定會更好!!!!.................................................................

江婷 said...

一個人的價值,應該看他貢獻了什麼,而不是他取得了什麼.................................................................

柏強 said...

閒來無聊逛逛blog~~跟您打聲招呼~~.................................................................

于庭 said...

成熟,就是有能力適應生活中的模糊。.................................................................

戴昀德 said...

到處逛逛~~來繞繞留個言囉~~~~.......................................................

祐祥 said...

支持你就對了!..................................................................

蕙春蕙春 said...

與其期盼別人疼你,不如自己疼自己。..................................................

香昱信張君林 said...

喜歡看大家的文章,每篇都是一個故事,都是一種心情~~祝大家開心愉快............................................................

婉婷 said...

Learning makes a good man better and ill man worse.............................................................

江美娟江美娟 said...

留言支持,請繼續加油,謝謝您囉~~............................................................

曾法幸 said...

Offence is the best defence...................................................

承蘋承蘋 said...

在莫非定律中有項笨蛋定律:「一個組織中的笨蛋,恆大於等於三分之二。」. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

劉士賢 said...

Learn wisdom by the follies of others. ............................................................

蕙王帆蕙王帆蕙王帆 said...

成熟,就是有能力適應生活中的模糊。............................................................

劉建黃志宇娥 said...

人生像一杯茶,若一飲而盡,會提早見到杯底..................................................

亦奈美妮 said...

愛,拆開來是心和受兩個字。用心去接受對方的一切,用心去愛對方的所有。......................................................................

偉曹琬 said...

No garden without its weeds.............................................................

偉曹琬 said...

做好事,不需要給人知道,雖然只是一件微不足道的事,但我相信,這會帶給我快樂。..................................................

劉王育正劉王育正 said...

好熱鬧喔 大家踴躍的留言 讓部落格更有活力..................................................

瑋洪洪洪洪洪婷 said...

好熱鬧喔 大家踴躍的留言 讓部落格更有活力..................................................

玉韓韓韓婷韓韓韓韓 said...

人生是故事的創造與遺忘。............................................................

翊翊翊翊張瑜翊翊翊 said...

請繼續發表好文!加油加油再加油!............................................................

恩宛玲如 said...

累死了…來去看看文章轉換心情~............................................................

fwqtsd said...

我們必須先有哭泣,才有歡笑;也必須先感到人生的悲哀,然後才感到人生的快樂。................................................................

司冯欣 said...

財富並非永遠的朋友,但朋友卻是永遠的財富。......................................................................