Wednesday, August 13, 2008

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MM Lee: Economic Growth Down 3%-4% in 2008, Foreign workers will take the brunt of Job Losses

Minister Mentor Lee Kuan Yew has further reduced the Singapore economic growth forecast for 2008 to between 3%-5%, after the Prime Minister Lee Hsien Loong revised it down to 4%-5% from 4%-6% during his National Day Speech.

The following is the News report on MM Lee's Singapore economic outlook for 2008-2009:
"PREPARE for a 'rougher ride' as the economy slows, but the Government will ensure that low income Singaporeans can cope with the bumps. Speaking at the annual National Day dinner at his Tanjong Pagar constituency, Minister Mentor Lee Kuan Yew said: 'We cannot protect our people completely from the high oil and food prices. But we will make sure that they can manage.' He referred to the slew of relief measures this year, costing over $3 billion, with many of them targeted at low wage workers.

MM Lee believes it looks 'increasingly likely' that the US credit crunch will cause a downturn when the new US President takes over in January. He said: 'There will be retrenchments in those industries whose exports to America and Europe are affected,' he warned. But foreign workers will take the brunt, 'saving many Singaporeans their jobs'."

The following are some forumers' responses to the report at the Singapore Property Forum:

Forumer 1 wrote:
Note: "foreign workers will take the brunt" ... more than 50% of private properties during the 2007 boom are bought by foreigners ... this will add more downward pressure on the private property price in the months to come!

Forumer 2 wrote:
This is just cut & paste what you like to read, not the full message. MM said GDP growth in next few years, worst case is 3%, best case is 8%, so there is no recession, Spore will continue to grow. Last year new foreign workers is 160k-180k, only 2-3% of them buy property, these are the talents & top end earner, those affected are not in this bracket, are those in the 97-98% bracket. Read carefully MM said, he is still very confidence of Spore growth, he mentioned China & India again to be the pillar in next few years of Spore, Asia & Global growth.

Forumer 3 wrote:
That's not the bottom line. The bottom line is that he implicitly ensured us that so long as PAP is in charge ppty prices in Singapore will never fall. Moreover, the skyhigh construction cost today will soon be passed to the ppty buyers. So, the sign is very clear now. Whether we want to solve the construction crunch or face a severe ppty crunch ahead. Either way ppty prices in Singapore is set to hit the higher level.

Forumer 4 wrote:
This is the most nonsensical argument. PAP was the government when property price plunged 50-60% during the Asian financial crisis and then the SARS. More than 90% Singaporeans already own their homes. So how can developers hope to squeeze them. If there's anything very clear that the govt is trying to do, it is to flood the market with supply of private properties. 68K units in the supply is a historical record that people may not yet understand the implications. I'd however agree that govt would want to keep HDB price stable, appreciating in tandem with economic growth. But private property, bet at your own risk. The price gap between a new private condo ($700-1000psf) and a new HDB ($200-$300 psf) in the same location is huge. Conclusion: There is a long way for private property price to fall.

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
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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