Singaporeans less likely to cut spending on property and renovations: survey

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Published January 21, 2009

Singaporeans less likely to cut spending on property and renovations: survey

By NISHA RAMCHANDANI


SINGAPOREANS are less likely than most of their Asia-Pacific neighbours to cut spending on property and renovations, according to a MasterCard survey.

The MasterCard Worldwide Index of Consumer Purchasing Resilience measures the resilience of planned expenditure categories to cutbacks, with zero the most vulnerable and 100 the most resilient.

In the property and renovation category, Singapore had a resilience score of 77.

The index looked at the categories of goods and services that consumers will spend on in the next six months, their importance to consumers and whether consumers will cut discretionary spending.

In Singapore, the fitness and wellness segment had the second-highest resilience index score of 73, followed by personal travel at 59. Dining and entertainment had a score of 54, while fashion and accessories rated 49.

Like most of the markets, Singapore failed to register a score in the consumer electronics category, since a market response of less than 30 per cent was not counted. Of the 14 markets surveyed, only Indonesia at 59.9 and Vietnam at 58.2 generated resilience index scores for consumer electronics.

'There is a high rate of home ownership in Singapore and house-proud consumers here will continue to spend on renovations and property category, to finance their mortgages and spruce up their homes,' said Yuwa Hedrick-Wong, MasterCard's economic adviser (Asia-Pacific).

'Spending on fitness and wellness has become increasingly important, especially for younger and better educated consumers and, therefore, it is not surprising that this category has emerged with a high resilience score,' he said.

As far as general purchasing is concerned, Singapore's average resilience index score of 62 trailed the Asia-Pacific average of 67. In comparison, China's score of 81 was the highest, while Japan was second with 76. Indonesia and India tied for third with 74.

Across the region, China had the highest resilience scores in two categories - personal travel at 75 and property and renovations at 85. Japan had the highest resilience score for dining and entertainment at 81, while India was top for fitness and wellness with 90. Indonesia had the highest score for fashion and accessories at 76.

'In general, the spending priorities of Chinese and Indian middle-class consumers are relatively resilient, showing their disposable income has so far remained healthy,' Dr Hedrick-Wong said.

The survey polled 6,000 consumers, about 400 of whom were from Singapore.

So how do we explain the low volume of home sales over the past 9-10 months?

If this survey is correct, it only means that actual home buying by Singaporeans is really a trickle, and that the bulk of the frenzied buying previously was down to speculation and foreign buying.