Americans concerned about rising housing, office costs in Singapore

Americans concerned about rising housing, office costs in Singapore

By Yvonne Cheong, Channel NewsAsia | Posted: 08 June 2007 2007 hrs


SINGAPORE: More Americans living in Singapore are concerned about rising housing and office space cost here, according to the latest survey by the American Chamber of Commerce (AmCham).

It is a double whammy for Americans working in Singapore.

Housing rents and office leasing costs have been going up, plus changes in their home country's income tax laws are leading to a jump in their taxes.

These have made it less attractive for them to work in Singapore and in Asia.

But AmCham says the business community is still bullish about the world economy and remains committed to doing business in Singapore and ASEAN.

Dom Lavigne, Executive Director of American Chamber of Commerce, said: "While the labour cost may be slightly on the higher side, productivity is one of the highest in the region. It's something that's really drawing companies back."

Another pressing issue is the shortage of places in international schools in Singapore.

AmCham estimates 200 Americans will relocate to Singapore with their families, which include about 300 school-going children.

They are working with the Singapore government for more space to expand the schools, and exploring the possibility of integrating some children into public schools as a short-term solution.

Also on the American wish list is a more integrated ASEAN where laws are applied more consistently across the board.

The Americans are also looking forward to Singapore taking over the chairmanship of ASEAN in July this year.

AmCham's Dom Lavigne said: "The challenge is coming up with transparent regulations which are streamlined across all markets. Some people have been advocating things like (a) single customers window, to make it much easier for companies to do business throughout ASEAN, just like doing business with EU which is a much more integrated market."

The AmCham survey also found that corruption was a concern for US businesses operating in Southeast Asia.

The survey, which polled AmCham members in six countries, showed corruption was regarded as a significant factor impacting business in Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Singapore was the only country polled out of the six where corruption was regarded as a non-issue, the results showed. - CNA/ir

Weekend, June 9, 2007

More Americans feel the pinch

Increasing rental costs a major concern for US companies here

Johnson Choo
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More American companies are feeling the heat from rising rentals for homes and offices here.

About 61 per cent say their housing expenses have swelled over the past six to 12 months, according to a survey by the American Chamber of Commerce (AmCham) in Singapore, which polled 95 senior managers from US firms.

The proportion is up significantly from the 42 per cent that felt so in the same poll last year, AmCham said on Friday.

The chamber's executive director Dom LaVigne said housing costs were increasingly a headache for Americans working here due to a recent reduction in the amount of housing allowance that an expatriate can exclude under the US tax code.

Rising office rents were also a concern. About 45 per cent said office lease costs had risen sharply this year versus 29 per cent last year.

Recent statistics back such views. Housing rentals have surged after being depressed for the past decade. With increasing en bloc activity taking more supply off the market, private home rentals have climbed unabated over the past few quarters.

Office rentals have more than doubled in the first quarter to $10.60 per square foot (psf) compared to the rate of $4.48 psf in the third quarter of 2003.

Complaints aside, US firms unanimously gave the thumbs-up to the quality of life here (see box).

"Our members continue to regard Singapore as an important place from which to conduct their regional business activities," said Mr LaVigne.

He added that senior management from at least two American companies were planning to relocate from around the region back to Singapore, citing reasons such as better living environment and business transparency.

AmCham said there might be some 200 new American expatriates arriving to work here in the year ahead.

They will bring with them about 300 school-going children, which could put a fresh strain on the international schools. To address the issue, AmCham said it was in talks with the Education Ministry on the possibility of enrolling some of the new American students into Singapore schools.

AmCham's survey showed bearish sentiments towards other Asean countries. Corruption, protectionism and weak laws were cited as major concerns. But these have not dented American interest in the region of some 600 million people, said Mr LaVigne.

He added that the American business community was looking forward to the day when Asean is unified as a single trade entity like the European Union.

June 9, 2007

Rising rents, property prices worry US execs here

More expressing unhappiness with rising costs in new business survey

By Ng Sook Zhen


RISING rents and housing costs are becoming more of a worry for senior executives at United States firms here, a new American Chamber of Commerce (AmCham) survey found.

And as local property prices and rentals rise in both residential and office markets, these American executives are increasingly expressing their dissatisfaction.

Amcham's annual Asean Business Outlook survey found that of the 95 senior executives in Singapore surveyed, 61 per cent were dissatisfied with housing prices, up significantly from 42 per cent last year.

The proportion of those unhappy with office lease prices also rose sharply to 45 per cent, from 29 per cent last year.

The Singapore results were part of a wider survey of AmCham members in the region. Together, AmCham members in the six countries surveyed represent an estimated US$50 billion (S$76.6 billion) of regional investment.

'Basically, it's very low levels of satisfaction for housing costs and office rents in Singapore,' said Mr Dom LaVigne, executive director of AmCham Singapore, at a press conference yesterday.

Residential property prices in prime districts - where these executives are most likely to live - rose 25.4 per cent last year. Islandwide, home rentals also climbed 10 per cent last year.

Changes to US taxation policy have also not helped American expats either, Mr LaVigne said.

Before last year, US citizens did not have to pay tax for a large part of their housing allowances, as any amount above US$11,894 was tax-free.

But new laws introduced last year introduced a cap on the tax-free component, so that any amount exceeding US$42,900 is taxed.

'The cap on housing allowance tax exemption has not been revised, and it's not an accurate picture of the true housing costs in Singapore,' said Mr LaVigne.

As for office rentals, American businesses see the increases as 'cyclical', or due to the strong Singapore economy, Mr LaVigne said. 'I think they are willing to ride it out.'

The survey also found that American executives were worried about the shortage of places at international schools here.

'We estimate about 200 expatriates will bring 300 schooling children - many of them are looking for an American- styled education,' said Mr LaVigne. 'As it stands, there is a waiting list of hundreds of students.'

Notwithstanding these concerns, American firms are here to stay. Some 82 per cent of the Singapore-based members expect their companies' business to grow in the next two years, and 71 per cent expect to increase their profits.

None of the executives surveyed expect a reduction in business for their companies.

Elsewhere in the region, sentiment among the 382 American executives surveyed was equally bullish. Some 62 per cent believe the region will be more important to their company's revenue, given the recovery of the regional economies, improvements in infrastructure and limited growth opportunities in other regions.

'Asean is still a very, very attractive destination for the US,' said Mr LaVigne.

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