Singapore – Island sits in an ocean of economic turbulence

Recommended by an anonymous emailer who I would like to thank for drawing my attention to the article. It is from the Sydney Morning Herald on the April 30, 2007.

Eric Ellis looks for explanations for Singapore’s booming property market.

SINGAPORE’S property market is roaring. And why I know that is because the lease on our apartment will soon expire and our landlady wants 70 per cent more rent than she did in 2004.

No matter that the place leaks like a Canberra cabinet and that its 1970s-wired electricity trips at least once a week: these are details too far for our poco-curante proprietrix. But she has noticed that a private banker from Tokyo has signed, sight unseen, for a same-sized unimproved flat downstairs at 150 per cent more than the vacating lessee paid, and she reckons we are getting a bargain for $6000 a month.

It’s all very puzzling as there’s no textbook rationale to the sudden real estate boom here. The economy’s growing at an unremarkable-for-Asia 6 per cent, much the same as it has for years, save the difficult “Asian Contagion” period of the late 1990s. There’s no more government pump-priming than usual, none of the official withholding of land to get prices artificially moving that’s much loved in Singapore’s rival for city-state hothouse, Hong Kong. And though wealthy enough, with just 4.5 million people Singapore is still 2.4 billion consumers short of being “Chindia”, Asia’s neologism du jour.

From Sotheby’s to shares, Singapore has no shortage of places to park cash. But new luxury apartment blocks are sprouting among the frangipani, touting all manner of metropolitan arcadia – infinity pools, gyms, private clubs. They sport funky names such as Trillium and Botanika, fashioned on hoardings in designer fonts usually seen in Wallpaper magazine. My favourite promises that the elysian towers rising behind it will be “Home to 46 of the Most Luminous Families” – which will presumably take care of electricity bills, also on the rise.

The reasons why it’s suddenly salad days for Singapore developers seem to reside in neighbouring Indonesia, a country rated by the graft watchdog Transparency International at 130th of the 163 nations it tracks in its annual corruption survey. TI’s first place, ie, the world’s least corrupt place, is occupied by Finland, Iceland and New Zealand. Australia ranks joint ninth with The Netherlands.

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About soci
Lived in Singapore for 6 wonderful years and has been blogging since 2003, under various names but always on Singaporean issues.

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