Saturday, June 28, 2008

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Singapore Economy Worsening But Singaporeans Most Optimistic about Economic Outlook

A survey shows that Singaporeans are the most optimistic in the Asia-Pacific region about the economic outlook for the second half of this year.

Here is the news report from Today:
S’porean consumers most confident: Survey
The latest results of a twice-yearly survey released yesterday show that consumers in Singapore are the most optimistic in the Asia-Pacific region about the economic outlook for the second half of this year. ...That confidence has been reflected in the strong 7.5-per-cent jump in retail sales in Singapore in April despite record-high inflation, with robust spending seen across most segments
Today, June 27, 2008

It leads one to wonder if such optimism is well-justified or a lack of foresight.
(You may say, "there you go again, the dooms day talk" but cautioning property buyers is the very reason for this blog. Believe me, it does get tiresome for me too to go on and on coaxing people to be careful. Like I said in another blog post: "Your property investment may be the sole determinant of your financial success in life" and it's just so important that you don't make any grave mistake in buying a property.)

Singapore economic data are nothing as optimistic as Singaporeans. For one thing, Singapore's May factory output fell 5.7%, much more than expected, providing more evidence that slowing demand in U.S. and Europe is hurting Singapore economy. Here are some headlines to sound the alarm:

SINGAPORE, June 26 (Reuters)
Singapore's May factory output unexpectedly fell 5.7 percent from April after seasonal adjustments, providing more evidence that slowing demand in U.S. and Europe was hurting Asian manufacturers.

Singapore Factory Production Down 12.8% (Agence France-Presse, 2008 )
Biomedical sector down 55.1% "Production in May dropped 12.8% compared to the same month last year, largely due to a contraction in the biomedical manufacturing cluster," said the EDB. The sharp plunge in biomedical output was due mainly to the pharmaceuticals segment which shrank 58.2% because a different batch of ingredients was produced. Agence France-Presse, 2008

经济师大跌眼镜 - zaobao 26 June 2008
5月制造业产值远比预期差 继4月份令人意外的疲弱数字之后,我国的5月份制造业产值再度远比预期的疲弱。

The general consensus among analysts is that situation is likely to worsen in the second half of this year.

So why's Singaporeans celebrating ?

It seems it's not just the Great Singapore Sales, the buying spree is back in the property market too.

About the flood of 99-year leasehold condo launches over the weekends like Centurion Kovan, Kovan Residences, Clover by the Park, Dakota Residences etc; some forumers have these warnings:

"New 99 LH price is above 1996's peak price but old 99 LH still below .. it goes to show 99 LH really depreciate in value quickly over time .. 99 LH bad investment option. "

"Not only that. Govt will not guarantee a renewal or top-up for the lease term once it expires. Sentiment will be weak towards this type of property."

"Developers are smart ... they're going to launch all the 99 LH first which are expensive for them to hold ... they said that prices have been dropped but actually the prices are lower simply because they're 99 LH. People who buy 99 LH at $900 to $1000 psf will utterly regret it ..their price will be the first to plunge in a market crash "

Singapore property price will ultimately hinge on the economic growth of Singapore. Before committing your life-savings and more to a property, do pay close attention to the development on the economic front. So far, the global crisis only looks worse each day.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation


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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)