Thursday, January 1, 2009

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S'pore economy may contract further, expect more retrenchments

Singapore's economy will probably contract further and more retrenchments can be expected in the next few months as companies are forced to downsized, Singapore's Prime Minister Lee Hsien Loong said in his New Year message on Wednesday.

Mr Lee said the economic outlook is highly uncertain. At each stage of this crisis, events have turned out worse than the experts predicted.

Governments everywhere have been implementing monetary and fiscal measures, rescuing troubled financial institutions and key corporations and pumping money into the economy. But no one is sure how the financial systems and economies will respond, or which policies will work.

'There is a loss of business and consumer confidence and, hence, one thing is certain: things cannot turn around overnight. Quite likely the global recession will be followed not by a quick rebound, but by several more years of slow growth,' Mr Lee said.

'We must therefore prepare for a difficult year ahead, and especially the first half of 2009. Our economy will probably contract further. More companies will be forced to downsize. So far we have not seen many job losses, but I expect more retrenchments in the next few months. We must be psychologically prepared,' he added.

In response to this economic crisis, Mr Lee said Singapore government's key focus is jobs - keeping people in jobs, helping workers who lose jobs find new ones, and retraining them with new skills.

Apart from lowering corporate taxes in 2008, two initiatives have also been implemented. One is the Skills Programme for Upgrading and Resilience (SPUR) which helps businesses pay for their staff training. More than 120 companies have come on board, which together will train more than 4,200 workers.

The second initiative is enhancing the government financing programmes for companies to ensure that basically sound firms, especially the smaller ones, can still obtain financing despite the tight credit climate, and so keep their operations going.

The government has also recently reduced interest rates and increased insurance premium subsidies under the schemes. These measures will benefit some 13,500 existing loans worth $550 million (US$381 million) and an estimated $3 billion in new loans.

Business Times - 31 Dec 2008
May also want to read:
99 Leasehold Property: Calculation of Depreciation Rate based on Singapore Land Authority Data
Spore Property History 1960-2008
Property Investment Tip: Don't put all your eggs in one basket
HDB Resale Price Index 1990-2008: Graph & Chart


danny said...

From article below, now is a great time to buy. sure to make $

Marked jump in HDB resale prices in Jurong West

More home buyers have flocked to the town, which used to conjure up images of sprawling factories and sleepy suburbia, because of the Jurong Lake District masterplan which intends to transform the town into a vibrant place. -- ST FILE PHOTO
View more photos
HOUSING Board flats in Jurong West saw significant price rises last year.
A study by property firm ERA has found resale prices of Housing Board flats there appreciated faster than those in other suburban towns such as Tampines and Woodlands.

More home seekers have flocked to Jurong West because of the Government's Jurong Lake District masterplan which involves a major upgrade to the area.

The ERA study compared the median prices of resale flats in the first quarter and the fourth quarter of last year.

It showed that the median three-room resale flat prices in Jurong West rose by 19.4 per cent or $34,000 last year, compared with 12.3 per cent in Tampines and 15.7 per cent in Woodlands.

Four-room flat prices rose by 14.1 per cent, above the 8.6 per cent rise in Tampines and 12 per cent rise in Woodlands.

Prices of five-room flats rose the least, at 9.4 per cent, similar to Woodlands but still way above the modest 1.3 per cent rise in Tampines.

The bigger executive flats may be less popular these days, but in Jurong West last year, resale prices rose by 16 per cent, compared with 4.9 per cent in Tampines and 6.2 per cent in Woodlands.

The town, which used to conjure up unappealing images of sprawling factories and sleepy suburbia, is to be transformed into a vibrant place to live, work and play over the next 10 to 15 years.

The plan for Jurong Lake District includes turning the area around Jurong East MRT station into a commercial hub.

Prices of resale flats in Jurong East are generally higher than in Jurong West.

In a separate statement yesterday, property developer Frasers Centrepoint Homes said that it was launching a 712-unit condo near Lakeside MRT station called Caspian.

ERA and another property agency PropNex are marketing the 99-year leasehold condo, which is targeted at HDB upgraders.

It is located within the Jurong Lake District and will be the largest launch so far this year.

Developers generally did not want to launch their projects ahead of the Jan 22 Budget and the Chinese New Year celebrations, given the already poor sentiment.

Still, Frasers Centrepoint had been aiming to launch Caspian after Chinese New Year.

Sales start today with a staff preview. The public preview starts on Saturday, with 250 units available at an average price of $580 per sq ft.

A typical two- to four-bedroom plus study unit can cost between $540 psf and $640 psf.

The chief operating officer of Frasers Centrepoint Homes, Mr Cheang Kok Kheong, said in the statement that feedback and analysis of their pre-sales surveys had confirmed pent-up demand.

'We have received strong interest from prospective owner-occupiers and even investors, who are now more keen to invest in brick-and-mortar property than risky financial instruments, especially if the property has a great potential upside to it.'

Another mass-market condo near Lakeside MRT station is The Lakeshore, which had seen the values of its units rise substantially since its 2003 launch and is reportedly selling at around $750 psf.

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