Property price is coming down fast

[seletar]

http://www.stuff.co.nz/the-press/new...from-Singapore

Lone Star founder deported from Singapore


STEVE KILGALLON
Last updated 13:08 24/02/2013


A founder of the Lone Star restaurant chain was deported from Singapore and fined for working illegally and hiring foreigners without work visas to launch a Kiwi- themed restaurant in the city-state.

The Fern and Kiwi, modelled on Lone Star, promised "the true flavour of classic Kiwi dining" when it opened last September - but by then management were already in trouble after staging an illegal flash-mob haka in Singapore's main shopping street to launch the restaurant.

Shane Hausler, one of five directors of the Lone Star business, went to Singapore to set up Fern and Kiwi but had only a tourist "Social Visit Pass" and was forced to leave. Three others, including two Kiwis, were also refused work visas and sent home.

"Mr Hausler was found to be running the restaurant without a valid work pass while in Singapore and illegally employing three foreigners, including one New Zealand national, to work at the restaurant, " a ministry spokesman told the Star-Times.

"He held a Social Visit Pass, which allows tourists to stay in Singapore for a short duration but does not allow them to work here. Composition fines were issued to Mr Hausler and the restaurant for the employment offences, which have been paid up. The two New Zealand nationals have since left Singapore."

Lone Star director Simon Dunlop said they were the victims of a sudden change in Singapore's employment law, the result of public dissent at the number of foreigners in the republic.

Dunlop said only one New Zealander, on a student work visa, remained on the restaurant's staff - and he'd almost given up on hiring Kiwis to work there. Another director, Steve Ward, said the Singapore Government had "not made it easy".

"Our business relies on the culture of our brand, " Ward said, "and bringing that to Singapore is very difficult when you can't employ New Zealand people."

The Singapore Ministry of Manpower said employers faced fines between S$5000 ($4,800) and S$30,000 ($29,000) and up to 12 months' jail for hiring foreigners illegally, while a self-employed foreigner without a valid work visa faced a fine up to S$20,000 and 24 months' jail.

The Fern and Kiwi offers a surf- and-turf menu, Kiwi wines and beer and New Zealand music on the stereo. In publicity at the launch, Hausler said: "We're stoked to bring a slice of true New Zealand to Singapore."

Ward said it had been tough going, and the business had been caught out by reaction to Singapore's nationalism movement.

New rules force businesses to hire Singaporean nationals before visas are granted to foreigner workers. Foreigners also need a degree from one of the world's top 200 universities, with Singapore recognising only Auckland and Otago degrees as good enough.

Dunlop has resorted to advertising online for graduates to be paid S$700 (NZ$676) a week and enjoy six weeks' free accommodation to work at the restaurant and said near-full employment in Singapore meant it was hard to find locals who wanted hospitality jobs.

The Lone Star chain began with the recently demolished Manchester St branch in Christchurch in 1988 and now has 21 restaurants nationwide; it was established by Ward and Tim Whelan, with Whelan's brother James, Jonny Phillips and Hausler making up a core of five executives who still run the franchise.

The Fern and Kiwi, said Dunlop, was meant to be the start of an Asian expansion. He said Lone Star was committed to staying but might be forced to take on a local business partner.

"Singapore has traditionally been a good place to do business and it still is - but at the moment, it is difficult, " he said.

"We know when you go into a foreign market you play by their rules and show them respect [but] if we had known what was going to happen with this employment law, we may not have proceeded. But now we are there, we will battle it out."

[seletar]

http://leongszehian.com/?p=3150

What the Budget means for a lower-income Singaporean?

Posted on February 26th, 2013 under Articles, Budget, Jobs


My name is John (not my real name). I am a 33 year old Singaporean worker earning $750 a month.

Disposable income drop?

Before the budget announcement, my take-home pay, after my 16 per cent employee CPF contribution was $630.

After the budget’s changes, with the eventual full restoration of my employee CPF contribution rate from 16 to 20 per cent, my take-home pay will be reduced by $30 to just $600.

To me, $30 less a month may make it even much harder for me to make ends meet.

How many low-income workers?

In this connection, according to the article “Leveling the playing field for workers” (Sunday Times, Dec 9) -

“It is no coincidence that most local low-wage workers toil in industries that depend on foreign migrants.

As of earlier this year, there were around 110,000 locals who earned less than $1,000 a month – excluding employer’s CPF contributions – despite working full-time, though their numbers have dwindled in the past two years. Some, like cleaners, have quietly battled both rising costs of living and falling wages.”

If there are about 110,000 locals working full-time who earn less than $1,000, how many workers including part-time workers earning about $750 and are below age 35 are there – who may be adversely affected by the CPF restoration, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the one-time Medisave top-up of $200 as I am not age 45 or older.

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

Wage Credit Scheme means pay increase?

I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme, as I and most of my fellow workers are paid more or less on a hourly basis.

More or less GST Offset?

As to the GSTV Cash Special Payment of $250, it seems to be in totality even less than the GST Offset package when it was first implemented in 2007. (“GST Offset much lower now for lower-income?“, Dec 31)

Why give less under the GSTV scheme compared to the original GST Offset package, and then give apparently more now under the budget announcement, which in totality may still be less than the original GST Offset package?

Negative real median income growth?

With regard to the real household income per member (including employer CPF contributions) of Singaporean-headed households with at least one employed person, increasing cumulatively by 10.2 per cent or 1.96 per cent per annum from 2007 to 2012, it may be of little meaning to me as my pay has not been catching up with inflation. Also, why is it that the real median income growth (excluding employer CPF contributions) was negative in 2012, 2011, 2009 and 2008, and only 0.5 per cent in 2010?.

$600,000 lifetime benefits?

As to “In total, over a lifetime, a young low-income couple with two children can expect to receive more than $600,000 in benefits in real terms (2013 dollars)”, with my low pay, I doubt if I will ever be able to find a spouse.

I understand that in the advanced countries (and I have been told that Singapore is an advanced country), basic social services like healthcare, education, etc, and decent wages that provide a reasonable standard of living, don’t get counted as “$600,000 in benefits”!

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: John is a fictional character)

Leong Sze Hian

[seletar]

http://leongszehian.com/?p=3102

GIC: Distinquish between “transparency” and “accountability”?

Posted on February 24th, 2013 under Articles, Classics, Investing


I refer to the article “‘Judge GIC on its long-term returns’” (Sunday Times, Feb 24).

GIC has attracted criticism?

It states that “But GIC has attracted criticism at home for various reasons, including not giving enough details of Singapore’s reserves.

3.9 per cent real rate of return?

GIC’s report out last year showed that it earned an annualised 3.9 per cent real rate of return over 20 years. In other words, the annual return was 3.9 per cent above the global rate of inflation.

Distinquish between “transparency” and “accountability”?

As to the questions of how much detail to release about returns and investment strategies, Mr Ng is keen to distinquish between “transparency” and “accountability”.

While many call for increased transparency, Mr Ng argues that what they are asking for, in substance, is accountability and that he feels is a valid request.

“It is reasonable for the Government to hold the GIC management accountable for its performance and the public to hold the Government and GIC accountable,” he said.

GIC does offer more points of comparison since two years ago. It now provides the five- and 10-year return of a portfolio made up of stocks and shares that a pension fund might hold.

Over time though, Mr Ng admits that there may be more information disclosed as GIC tries to respond to the challenge of helping the public understand what it does.

It’s a constant communication process.”

Rate of return in US$?

Reading the above, you may not realise that the rate of return referred to was in US$ and not S$.

In this connection, I thought it may be interesting to reproduce what I wrote about the GIC’s annual report last year:-

I refer to the article “GIC’s real rate of return over 20 years steady at 3.9%” (Straits Times, Jul 31).

No more S$ returns?

In the past, the GIC used to give the returns in S$ terms as well, instead of just US$.

So, why is it that this year’s GIC annual report once again reports the returns in US$ only?

As the S$ has been appreciating against the US$, how much lower would the returns be in S$?

Have 20-year real returns, but no 5 and 10-year?

I find it rather strange that GIC’s report gives the annualized real rate of return over a 20-year period, but not the real rate for 5 and 10 years.

If it can give the nominal returns for 5, 10 and 20 years, why can’t it give the real returns for 5 and 10 years too?

For example, as the 5-year nominal return was only 3.4 per cent, what was the real return?

GIC returns reporting like a chameleon?

For example, GIC reported its 20-year nominal returns in both US$ (5.7%) and S$ (4.4%), in its 2009 report (see HERE). It also gave the real return in S$, at 2.6 per cent, but not in US$.

However GIC’s 2010 and 2011 reports only gave returns in US$. Which means that the report went from reflecting no real US$ returns in 2009, to only real US$ returns in 2010 and 2011, being 3.8 per cent and 3.9 per cent respectively (see HERE), and no longer in S$. Why is this so?

In its 2011 report, GIC disclosed the 5 and 10-year nominal US$ returns (being 6.3 per cent and 7.4 per cent respectively), instead of just the 20-year returns in previous reports. However, the then new 5 and 10-year returns were only given in nominal and not real terms? And again why were the returns not reflected in S$?

GIC vs Temasek?

Since Temasek gives its returns from inception, why can’t the GIC do the same?

As GIC gives the rolling 20-year returns, why can’t Temasek do the same too?

Otherwise, it may be difficult to compare GIC and Temasek’s returns. It is akin to trying to match two different rulers with different measurements.

As if trying to watch one chameleon was hard enough – try watching to keep track of two!

Returns help Government spending?

With regard to “”GIC’s investment returns flow through to the government budget which then allows the Government to spend on different areas”", I thought it may also be interesting to reproduce what I wrote about the Reserves’ Net Investment Returns (NIR) contribution last year:-
I refer to the article “Social spending – where will money come from?” (Straits Times, Sep 4).

How much total reserves?

It states that “If you add the three pools of reserves up, you get about $800 billion. A very modest 2 per cent return on that comes up to $16 billion a year.

The Net Investment Returns (NIR) contribution last year was $7.91 billion. And even if we assume that the NIR contribution last year had hit the 50 per cent cap, activating the other 50 per cent of NIR would mean an additional $8 billion to the Government”.

Only 2% return on reserves?

Since the total sum of Singapore’s reserves is a secret, even if we assume that the above conservative estimate of $800 billion is correct, 50 per cent of the NIR assuming an average annualised return of say five per cent, would be about $20 billion.

Temasek 17, GIC 6, but NIR 2%?

This estimated NIR is not unrealistic, given that Temasek’s and GIC’s annualised returns have been reported at 17 (S$ terms) and around six per cent (US$ terms), respectively.

So, even if we spend a lot more on social spending, just the NIR alone may be sufficient, without even talking about the huge budget surpluses in the past, with about nine out of every 10 years in surplus.

Secrets of Singapore?

Of course, the fundamental questions as to why the percentage of the NIR used in a year, the sum of total reserves or the annualised return on the total reserves are a secret, remain.

Spend more, tax more?

As to “As Prime Minister Lee Hsien Loong said in his Aug 26 National Day Rally speech, “nothing falls from heaven”. So taxes will have to go up eventually to fund higher social expenditures – “not immediately” but within the next 20 years.

Annual health-care spending will double to $8 billion over the next five years. This year, the Government introduced the permanent GST Voucher, which pays out a combination of cash, conservancy rebates and Medisave top-ups, with more for older and lower-wage Singaporeans, to offset increases in the goods and services tax. This will cost the Government $680 million this year.

Also formalised in 2007 is the Workfare Income Supplement, which supplements low-wage workers’ income with cash and Central Provident
Fund (CPF) top-ups. This cost the Government $260 million last year.

NIR alone enough for extra spending?

Plans are also under way to spend $60 billion over the next 10 years to improve the transport system.”, even adding all of the above comes up to a total of only about $15 billion a year.

Don’t include current expenditure as additional spending?

However, on closer scrutiny, one would realise that the above amounts includes current expenditure that we are already spending. So, the additional expenditure is actually only about $10 billion a year.

As explained above, the NIR alone may be about double this additional
expenditure in a year.

Thus, the consistent rhetoric that if we spend more means we have to raise taxes, does not seem to hold water, not to mention that we have so far not spent significantly more relative to revenue in the last decade or so.

Accounting treatment of Budget surplus?

With regard to “But the Government also spent $8.58 billion of special transfers on programmes such as Workfare, and top-ups to various endowment funds, such as the Medical Endowment Fund”, this may be a fundamental issue with the way we determine our Budget surplus or deficit, because almost all countries would fund the social expenditure as an expense every year, instead of Singapore’s never-ending annual transfers to top-ups to the various endownment funds.

I understand that an arbitrary four per cent of an endownment fund a year, is then used to fund MediFund, Workfare, etc.

The result of this may be that the Budget surplus may be significantly under-reported, compared to other countries.

If we change to what other countries do, there may actually be a lot more money that we can spend on social spending, on top of the NIR explained above.

Leong Sze Hian

[DKSG]

From the last few posts, I think we can conclude that property bad news is dwindling ...

DKSG

[avo7007]

From the last few posts, I think we can conclude that property bad news is dwindling ...

DKSG

Well the forum is not actually overflowing with good property news too.

[minority]

suddenly become anti government thread. Cannot talk the property down. talk the government down?

[teddybear]

No, it is because don't need to talk down the property price any more as all the cooling measures already do the work. So they very free can talk down govt lor! Who ask govt go implement cooling measures to achieve their wish? Now back fire?

suddenly become anti government thread. Cannot talk the property down. talk the government down?

[Rysk]

No, it is because don't need to talk down the property price any more as all the cooling measures already do the work. So they very free can talk down govt lor! Who ask govt go implement cooling measures to achieve their wish? Now back fire?

TWIST & TURN cum DIVERT ATTENTION EXPERT MR B (aka David Lim) & YOUNG KOK cum INEXPERIENCE SELETAR airbase (aka SMARIAN) should have blamed the gov for implementing the Pty Cooling Measures

Without CMs.. the uptrend may only takes 2-3 yrs before any price correction..
Now with CMs.. it has "prolonged" the uptrend to 7-10 yrs before it reach the "top".. before next price correction..

[avo7007]

[COLOR="Red"]
Without CMs.. the uptrend may only takes 2-3 yrs before any price correction..
Now with CMs.. it has "prolonged" the uptrend to 7-10 yrs before it reach the "top".. before next price correction..

Is that your prediction? Prices will go up for the next 7-10 years?

[Rysk]

Is that your prediction? Prices will go up for the next 7-10 years?

If I base on current uptrend started in 2010.. then maybe it will last till 2017-2020..

But thereafter when is major correction?.. nobody know

[phantom_opera]

If I base on current uptrend started in 2010.. then maybe it will last till 2017-2020..

But thereafter when is major correction?.. nobody know

I agree with Rysk ... CMs serve to moderate the increase but also remove the weak hands in the market ... since last year median family income up 7.5% more than property price growth of 5% or inflationi rate of 4.5% ... after a few more years, affordability will improve so even more unlikely to have major correction

[seletar]

http://www.stproperty.sg/articles-pr...homes/a/106737

Higher taxes on high-end and investment homes

THE well-off who own luxury residences and investment homes will pay higher property taxes

The Straits Times - February 26, 2013
By: Esther Teo, Property Correspondent



Mr Sameer Aswani, 37, at his home at 9B Broadrick Road. He says it would be fair to pay more taxes if one could afford to buy a luxury home. -- ST PHOTO: DESMOND LIM


THE well-off who own luxury residences and investment homes will pay higher property taxes.

These will be introduced in phases over two years, starting Jan 1 next year.

Most owner-occupied homes, however, will enjoy a lower tax rate, said Deputy Prime Minister Tharman Shanmugaratnam yesterday when he presented the 2013 Budget.

"This is fair. The property tax is a wealth tax and is applied (to homes) irrespective of whether lived in, vacant or rented out. Those who live in the most expensive homes should pay more property tax than others," he said.

So, owner-occupiers of landed homes in central areas with an annual value of $150,000, for instance, will stump out 69 per cent more in property tax or an additional $5,120 a year. The annual value is the estimated annual rent the property may fetch.

But mindful that some retirees may be cash poor while living in homes of significant value, Mr Tharman said the new tax structure will ensure that most retirees pay less in property tax.

The new tax structure, which he tagged a "more progressive property tax", will swell government coffers by an additional $53 million when it takes effect fully on Jan 1, 2015.

But it will allow the Government to achieve greater social equity without hurting Singapore's economic competitiveness or reducing the incentives for enterprise, the minister added.

Besides new tax rates, the tax bands will also undergo changes.

The zero property tax band will be widened to the first $8,000 of a home's annual value, from $6,000. This will allow 950,000 owner-occupied homes to enjoy some tax savings, he said.

Homes with annual values of $12,000, like a five-room Housing Board flat, will save $80, which works out to 33 per cent of their current bill.

These savings will reduce property tax revenue by $44 million.

Besides the existing zero, 4 and 6 per cent tax rates, five higher rates will be introduced: ranging from 8 per cent to 16 per cent.

This means the top 1 per cent of owner-occupied homes - or 12,000 units - will pay more taxes, contributing an extra $25 million in revenue. But the increases will be small except for those at the very top.

For investment homes, which are not owner-occupied, new marginal property tax rates of 12 per cent to 20 per cent will be levied instead of the current flat 10 per cent rate across the board.

So while homes with annual values of $30,000 and below will continue paying a 10 per cent tax, investment homes with an annual value of more than $30,000 will pay higher taxes of between 12 per cent to 20 per cent.

These properties belong to the top one-third of all non-owner- occupied homes, or the top half of private homes, said Mr Tharman.

However, most investment suburban condominiums will see a small increase in property tax of about $100 to $300 per year with increases only "significant" for high-end properties.

These changes for investment homes will net the Government $72 million more in revenue.

Property tax rates for nonresidential properties will remain unchanged at flat 10 per cent. Tax refunds on vacant properties will be removed to provide consistency and equity in tax treatment, said Mr Tharman.

Real estate investor Sameer Aswani, 37, who owns investment homes in such upmarket condominiums as The Sail and Marina Bay Residences, said that from a businessman's point of view, the higher taxes are obviously not preferred. "But from a government's point of view, in the light of inflation, they have to take care of the 80 per cent who own HDB flats.

"If you have the money to buy high-end homes then maybe it's fair that you pay more taxes."

[seletar]

http://www.straitstimes.com/premium_all
Straits Times
Published 28 Feb 2013

Squeeze on 70,000 mid-skilled foreigners

About one in two S Pass holders will be affected by new approval system

By Janice Heng



ABOUT 70,000 foreign workers are at risk of not having their S Passes renewed when they expire.

This is because a new tiered system for approving S Passes is being introduced, which stipulates more experienced pass holders have to be employed at higher pay to continue working here.

The policy, said experts, is aimed at levelling the playing field for Singaporean workers, who may be losing out to foreign counterparts with the same qualifications and experience because the latter command lower pay.

The Ministry of Manpower (MOM) said about one in two S Pass holders will be affected by the new system.

There were 142,400 S Pass holders here as at the end of last year. S Pass holders are mid- skilled foreign workers who earn at least $2,000 a month. This will be raised to $2,200 from July.

The new tiered system will also kick in from the same date.

Older applicants who have better qualifications and more years of experience will now need to be employed at higher minimum pay in order to secure their S Passes.

Exactly how much higher will, however, not be known because MOM will not be giving details of these salary tiers.

The ministry said the tougher requirements are meant to "level the playing field for locals" and encourage employers to bring in "higher calibre S Pass holders".

Mr Zainudin Nordin, who chairs the Government Parliamentary Committee for Manpower, said it is about making firms pay the true value of S Pass holders, and "to be fair to our locals".

Employers told The Straits Times yesterday that the changes will force them to relook the pay of their mid-skilled foreign workers. Some prefer to hold on to experienced S Pass holders instead of finding local replacements, and would raise pay if need be.

Many such workers at construction firm HSL Constructor already earn $2,400 to $2,500, which managing director Lim Choo Leng hopes will be high enough for their passes to be safe.

But he is open to raising their pay, adding: "We are so short of people already. If they are good, we will try to keep them."

The story is similar in the food and beverage industry, where S Pass holders tend to be managers.

As many firms there hire experienced S Pass workers at low salaries, "a large jump" in pay might be needed just to keep them, said Fish & Co deputy managing director Hoo Hoe Keat.

Bringing in young foreigners on minimum S Pass pay is not preferred, as they will have to be trained from scratch, he added.

OCBC economist Selena Ling expects the "wage shock" to be significant, especially for industries where local replacements are hard to get.

Bosses said they hoped for more clarity on the salary tiers. Though the MOM is unlikely to set out explicit criteria, its online Self Assessment Tool will be updated in a few months, letting bosses assess the eligibility of workers under the new criteria.

Uncertainty, however, is no stranger to S Pass holders such as Ms Luningning Estabillo, 32.

The Filipino assistant restaurant manager at Fish & Co had her S Pass renewed last month, but some of her friends have not been as lucky. Some on three-year contracts could not get a renewal after the two-year term. "You're thinking you still have one more year to work, but then you have to go home, unprepared," she said.

[email protected]

[avo7007]

This tiered S Pass system might affect HDB rental next year......

[seletar]

http://www.stproperty.sg/articles-pr...-heat/a/106705

Big-ticket homes to feel harsher tax heat

Non owner-occupied premises will see the highest rates in property taxes

The Business Times - February 26, 2013
By: Mindy Tan



Up, up and away: With investment property taxed the most, investors may take their capital overseas or they may switch to commercial properties as tax rates for non-residential properties remains at 10%. - PHOTO: YEN MENG JIIN


OWNERS of high-end homes will face higher taxes, with investment properties bearing the brunt of the increase.

In a shift towards a more progressive tax structure, the tax band for owner-occupied homes was expanded from the current 0 per cent, 4 per cent, and 6 per cent tax rates, to encompass a a wider range of rates, ranging from 0 per cent to 16 per cent.

Under the new tiered rates, an owner-occupied landed property in the central area with an annual value (AV) - estimated annual rent - of $150,000 will see an increase in property tax of $5,120 per year.

Marginal property taxes for residential properties that are not owner-occupied and, therefore, owned for investment purposes, will be increased to 12 per cent to 20 per cent, from the current 10 per cent.

At the high end, a landed property in the central area with AV of $150,000 will see an increase in property tax of $9,000 a year (60 per cent increase). Suburban condominiums, on the other hand, will see a smaller increase of about $100 to $300 per year.

SLP International's head of research Nicholas Mak noted that while the percentage increase in taxes specific to luxury homes appears big, the quantum increase is "marginal" compared with the rental income received.

"Most high-end property buyers who can afford luxury properties will likely take the increase in property tax in their stride," he said.

Petra Blazkova, head of CBRE Research, Singapore and South-east Asia, said: "The graduated property tax on luxury properties... may put pressure on the holding cost of investment properties held by developers and investors. At an asset level we are likely to see yields compressing, even though only marginally."

Savills Singapore research head Alan Cheong too said he does not expect the new rates to impact rents significantly, given that rents are more dependent on demand and supply.

"However, taken in circumspect, it appears that with the higher marginal tax rates added on to personal taxes, owning a high-end real estate here for investment is becoming less of an attractive proposition than investing in one in a developed economy where taxes are higher. This will encourage more to take their capital overseas," said Mr Cheong.

Another possible effect is that property owners may switch to buying commercial properties given that property tax rates for non-residential properties remains unchanged at 10 per cent, said KPMG tax partner Leonard Ong.

"This will drive up the cost of commercial properties and overall business costs," said Mr Ong.

"We do not think this revision in tax rates will have any significant impact on the residential market. Some investors may choose mass market homes over the high-end segment as a result of the potential tax savings but we do not think there will be any general shift in demand," said Jones Lang LaSalle's head of research, South-east Asia, Chua Yang Liang.

The Budget is clearly about anchoring Singaporeans at the core, said Ho Mui Peng, tax partner with PricewaterhouseCoopers Services.

"The widening income disparity is managed somewhat with loading property tax increases, to the high-end property owners and increase in additional registration fees for high-end cars," she said.

Indeed, the more aggressive wealth tax means that the majority of owner-occupied residential properties will enjoy lower tax rates.

Specifically, some 950,000 owner-occupied properties will enjoy tax savings, with the widening of the 0 per cent property tax rate band from the first $6,000 of annual value, to $8,000. This means that homes with annual values of $12,000 (such as a five-room HDB flat) will experience tax savings of $80 (33 per cent of their current property tax bill).

All one- and two-bedroom HDB flats will continue to pay no property tax.

The revision in tax rates is a redistribution of tax liability from the cheaper asset class to the more expensive asset class, said Lee Liat Yeang, real estate partner at Rodyk & Davidson LLP.

"As long as the property is for owner-occupation, with AV below $55,000, you're not affected," he said. "With an AV of more than $50,000, your rental has to be pretty high, at least $7,000 per month... So it's a redistribution of tax liability and burden from the poorer class to the wealthy class."

The new tax structure for residential properties will be phased in over two years starting from Jan 1, 2014. The revised rates will take full effect from Jan 1, 2015.

Separately, the concession which provides tax refunds on vacant properties has been abolished, and will take effect from Jan 1, 2014.

Savills's Mr Cheong said: "This may have serious implications on the rental market in that it could force individuals or companies, to (dispose of) their vacant units onto the market at a time when rental budgets are constrained and the net number of employment passes issued have not been growing."

Added SLP's Mr Mak: "The impact is greater on owners who are holding on to properties for generating rental income, namely, real estate investment trusts. But the impact on the residential property market is minimal."

[seletar]

http://leongszehian.com/?p=3175

What the Budget means for a lower-income Singaporean? (Part 2)

Posted on February 27th, 2013 under Articles, Budget, Jobs


My name is Jane (not my real name). I am a 33 year old Singaporean worker with a basic pay of $500 a month. With overtime and allowances, I can earn as much as $1,900 because my normal work hours are 12 hours a day for six days in a week.

How many low-income workers?

I understand that there are about 400,000 local workers who only earn about $1,200 or less a month.

How many workers earning about $1,900 or less and are below age 35 are there, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the one-time Medisave top-up of $200 as I am not age 45 or older.

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

Labout costs increase?

My employer tells us that his labour costs will go up, because of the increase in the foreign workers’ levy.

His transport costs may also go up because of the minimum 40 per cent down-payment and reduction of the maximum car loan period to five years.

Because of the lower foreign worker dependency ratio, he may have to pay more than previously, to get more local workers.

From past experience, he thinks that permanent residents (PRs) may be more willing to work for a lower pay, relative to Singaporeans.

100% local workers can be PRs?

So, I guess I may still end up as one of the very few Singaporeans in my company, because 100 per cent of the local workers can be PRs.

With the population white paper saying that there may be as much as 30,000 new PRs granted per year in the future, perhaps this state of affairs may continue.

Wage Credit Scheme means pay increase?

Existing workers like me may not get a pay rise, if my emoloyer has to pay much more to get new workers.

With all the above problems, I think my employer may be hinting to us that there may be no increase in pay again this year.

Inflation may rise?

With all these talk about rising costs, will inflation rise and make my life even harder?

I also had no pay increase last year because my company lost a contract to a competitor company which tendered a lower bid, as i was told that they were paying their workers even lower wages than our company.

Foreign worker’s levy works?

In the past, whenever the foreign workers’ levey was raised, some employers simply managed to get new foreign workers from countries who were willing to accept lower wages. This, in turn, caused Singaporeans’ wages to be depressed too.

As the recent “bus drivers’ strike” incident has shown – the foreign drivers were still about 25 per cent cheaper than Singaporean drivers, even after accounting for their foreign workers’ levy, accomodation and transports costs. (“A statistical analysis of the SMRT strike? – Balancing Growth, Foreigners & Meritocracy“, Dec 4)

So, I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme.

Dependency or target ratio?

I don’t know why they call it a dependency ratio, as I see so many companies treat it like a dependency target, to max out the non-Singaporeans that they can employ. Everywhere, I see jobs like administration, reception, IT, etc, that i believe Singaporeans are willing to work if the pay is decent or they don’t have to work 12-hour days forever like me.

Still need more time to study?

The budget statement said that they still need more time to study what other countries do – allow foreigners only when employers can show that they have tried and are unable to get citizens to work – this problem has been going on for years – so, how much more time do they need to study some more?

How much more revenue?

The budget statement was very detailed about how much it would cost the Government to give out so many benefits to businesses and individuals, but I don’t seem to be able to find any mention as to how much additional and total revenue are estimated to be collected, due to the increase in foreign workers’ levies.

It may be akin to telling you how much we will spend to help you, without telling you how much more money will be made?

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: Jane is a fictional character)

Leong Sze Hian

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http://singaporearmchaircritic.wordp...sts/#more-2240

Singapore Armchair Critic
Published: February 27, 2013

No Respite from Rising Medical Costs

by singaporearmchaircritic

Before Budget 2013 was announced, many of us would have learned about the spike in our health insurance premiums either through the media or the letter from CPF.

Come March, Medishield premiums and integrated shield plan premiums will see a hefty increase. Because the Medisave withdrawal limit for each premium is up to $800 per insured person per policy year, any sum above $800 would have to be paid out-of-pocket.

Sigh.

If you are a Singaporean, you would be familiar with the saying that one can die but cannot fall sick in Singapore. Some of us might have said it in jest and our foreign friends might think it was an exaggeration.

Yet increasingly, high medical costs in Singapore is making this more of a painful reality than a joke. According to the Mindshare survey 2012, 72% of Singaporeans believe that “we cannot afford to get sick these days due to high medical costs.”

Has the Budget 2013 addressed this very real concern of Singaporeans?

In DPM’s budget announcement, he said the government would look into lowering Singaporeans’ out-of-pocket health spending (report).

Singaporeans’ out-of-pocket medical spending is the highest among the East Asian developed economies. Fifty-four percent of our total health expenditure is paid out-of-pocket, compared to around 30-35% in Hong Kong, Taiwan and South Korea. Citizens of the Nordics pay less than 20% of their medical expenses out-of-pocket.

Our public health expenditure as a percentage of GDP is also the lowest among these economies (see Figures below).
http://singaporearmchaircritic.files...g?w=1050&h=780(Data sources: WHO Data Observatory, Taiwan & Hong Kong). Note that Medisave is not counted as out-of-pocket spending in the Singapore figure.

http://singaporearmchaircritic.files...g?w=1050&h=677(Data sources: World Bank & others). Note that private health expenditure in this chart includes out-of-pocket expenditure borne by individuals.


Although DPM said that the government will “study” how it may broaden the usage of Medisave and Medifund, the Budget statement provides no further detail.

Instead, the key initiative drawn up in the Budget is to channel more money to three funds: the Medifund, the Eldercare Fund, and the Senior’s Mobility and Enabling Fund. The government top-ups amount to $1 billion, $250 million and $40 million respectively.

Before you applaud these seemingly generous injections of capital, do know that only the interest income from these funds may be used.

Elderfund subsidized the operating costs of nursing homes run by voluntary welfare organizations; Medifund is only for those who cannot afford to pay the charges at restructured hospitals even with Medisave and Medishield.

To be eligible for the Senior Mobility and Enabling Fund, you must be a senior citizen with a per capita household monthly income of $1,500 and below, or live in a residence with an annual value (estimated rental value) of not more than $13,000 if your household has no income.

Given the stringent eligibility conditions, how may these initiatives benefit most Singaporeans and reduce the medical expenses we pay out-of-pocket?

Singaporeans have every reason to be skeptical.

Despite repeated calls by experts and ordinary Singaporeans to reform the use of Medisave, the government is slow and reluctant to lift the restrictions, leaving us to fork out what little cash we have to pay for our medical expenses.

As recently as in late January, the Health Minister had dismissed Lee Li Lian’s suggestion to lift Medisave restrictions for senior citizens above 75 years old, saying that “elderly Singaporeans may face greater financial difficulties down the road if they are allowed to use up their Medisave fund without restrictions” (source).

This sort of preposterous argument, coming from the Health Minister himself, only goes to confirm our suspicion that the government couldn’t care less about our wellbeing.

Fine then. Many Singaporeans also couldn’t care less about the government’s promise to take up a larger portion of medical costs.

Just give us the right to use our own Medisave money for essential healthcare needs.

As this reader asks in a letter to Today:
“What is the purpose of having so much in Medisave while having to pay for high medical expenses out of pocket? What is the purpose of getting citizens to top up their parents’ Medisave accounts?”

[seletar]

http://www.todayonline.com/business/...rb-bubble-risk

TODAYonline
business - 01 Mar 2013

Singapore avoids stimulus as Tharman acts to curb bubble risk


Arrival of DPM & Minister for Finance Tharman Shanmugaratnam for Budget Day, 25 Feb 2013...Photo: Ernest Chua.


SINGAPORE — Finance Minister Tharman Shanmugaratnam said there’s no need for monetary stimulus in a country with full employment, adding that unorthodox tools must be used to prevent asset bubbles.

“We don’t have an output gap, and evidence of that is in an extremely tight labour market,” Mr Tharman, 56, said in a Bloomberg Television interview yesterday.

“In that context basically, you can’t have an easy monetary policy, which in our case is an exchange-rate policy.”

The minister, who also discussed so-called currency wars and Singapore’s efforts to limit the influx of foreign workers in an hour-long interview, said property prices need to stabilise further even as measures implemented earlier this year begin to take effect.

A search for higher-yielding assets amid monetary easing in developed economies has fuelled record property prices in Singapore, sparking inflationary pressures and social tensions.

The central bank tightened monetary policy in 2012 by allowing faster currency gains even as the economy grew the least in three years.

“We can’t just rely on exchange-rate policy and monetary policy to prevent bubbles from being formed,” said Mr Tharman, who is also deputy prime minister and chairman of the central bank. “You’ve got to find ways of throwing sand in the wheels, you’ve got to add some friction in the process.”


PROPERTY CURBS, ENTRENCHED INFLATION

Singapore has imposed steps to cool the housing market since 2009, with the last round in January including an increase of as much as 7 percentage points in stamp duties. The finance minister said he is “pretty confident” that the government will get a handle on the situation.

“We’re still in a wrong part of the cycle,” and there is still “some ways to go” before prices are at an acceptable level, he said.

“It’ll happen through a combination of income improvement, as well as prices certainly not going up further, but some correction in prices will not be out of order.”

While the government will never be able to tame the “sentiment-driven” market, it has to limit gains because of the social impact when people can’t afford to buy homes, Mr Tharman said.

“We can prevent a real bubble from being formed which then eventually crashes, and that’s our objective,” said the minister, who obtained his master’s in economics from the University of Cambridge and holds a master’s in public administration from Harvard University in Cambridge, Massachusetts.

“We can’t use the full arsenal in one shot,” he said, referring to seven rounds of property curbs since 2009.

The city forecasts growth of 1 per cent to 3 per cent in 2013. Expansion “could come out at the lower end” of the range, Mr Tharman said in the interview at the Ministry of Finance.

Singapore’s jobless rate fell to a five-year low of 1.8 per cent last quarter as companies hired more local workers after the government tightened the inflow of foreign labour.

“There is no need to ease policy at the moment,” said Mr Vishnu Varathan, an economist at Mizuho Corporate Bank Ltd in Singapore. “They don’t want entrenched inflation expectations especially as the labour market has not loosened.”

Singapore sets monetary policy via the nation’s dollar, guiding the exchange rate against a basket of currencies within an undisclosed band. The Monetary Authority of Singapore adjusts the pace of appreciation or depreciation by changing the slope, width or centre of the band.


CURRENCY WAR

Singapore’s currency has depreciated 1.2 per cent against the US dollar this year, after reaching an all-time high on July 27, 2011, and climbing 6.1 per cent in 2012.

Singapore has remained vulnerable to fluctuations in overseas demand for manufactured goods. The government has boosted the financial services and tourism industries to become less reliant on exports.

“The biggest issue is still what happens in the most developed economies,” Mr Tharman said, referring to potential threats to Singapore’s growth.

“As a highly open economy, as an economy that lives by being global and regional, that matters to us.”

Mr Tharman, who is also the chairman of the International Monetary Fund’s steering committee, said policy makers in developed economies such as the US, Europe and Japan “have their monetary settings about right.”

The risk of a currency war has surfaced as monetary easing from Japan to the US spurs demand for higher-yielding assets and boosts inflows into emerging markets. Russia said in January that policies which end up weakening currencies may lead to reciprocal action as nations try to protect their export industries.

While talk of currency wars “has run further than the reality,” there is now a good understanding among “major players” about what is appropriate, Mr Tharman said. “There might have been a little bit of clumsiness in public statements.”

Mr Tharman unveiled tighter curbs on foreign labour for a fourth consecutive year when he presented the annual budget on Feb 25. In a white paper released in January, the government said total workforce growth will ease to 1 per cent to 2 per cent annually through 2020, compared with an average rate of 3.3 per cent per annum in the last three decades.


LABOUR FORCE

“The foreign workforce can’t keep growing faster than the local workforce, not indefinitely,” Mr Tharman said. “That’s why our key priority now, our most important economic and social strategy is that of raising productivity to a new level.”

The government has stepped up efforts since 2010 to restructure the way companies operate and make productivity a cornerstone of the economic blueprint for this decade. Officials blamed some industries’ use of cheaper, low-skilled foreign labour as a reason for low productivity in the last decade.

“If you don’t raise productivity, it’s hard to raise incomes,” Mr Tharman said. “And if you can’t raise incomes for the average person, for the median household and for those at the lower end of the wage ladder, your society frays.” BLOOMBERG

[seletar]

http://www.todayonline.com/business/...-new-tax-rules

TODAYonline
Property - 01 Mar 2013

Investors hardest hit by new tax rules

Under the new property tax measures, investors will be hard-pressed to sell their units quickly or lease them out. TODAY file photo

By COLIN TAN


Much has been made of the impact of the new property tax measures on high-end developers, but I would say that the hardest hit would be the investors.

Under the revised tax rules announced in Budget 2013, investment property owners will face higher tax rates on the assessed annual values (AVs) of the properties from next year. The higher rates will apply even if the units are left vacant. Previously, developers and investors could apply for tax rebates for unleased or vacant units.

Under a progressive tax rate structure, high-end properties with their higher assessed AVs would be the hardest hit.

Developers with unsold units in completed luxury projects will face significantly higher holding costs. But at least they have a choice. They can sell their problem away, albeit with vastly reduced profit margins. In any case, they have enjoyed the “good years” since 2010.

Not so for investors, who will be hard-pressed to sell their units quickly or lease them out.

Some investors have chosen to keep their newly-completed investment properties vacant while they seek a good price in the market. They do so in order to retain the price premium that new units usually command over previously-occupied ones.

After many rounds of cooling measures, it is getting increasingly difficult to find home buyers, let alone buyers of completed units. Indeed, much of the buying action has been focused on new launches.

In addition, investors who are thinking of selling properties bought within the past four years have to factor in the sellers’ stamp duty, whereas developers face no such hurdles. If investors cannot sell with a reasonable profit, they will have to lease out their units.

Official statistics show that at the end of last year, there were a total of 14,869 vacant private housing units, comprising 2,285 landed and 12,584 non-landed homes.

If the owners of all these units now choose to lease them out, what do you think would be the impact on the rental market? Well, they have 10 more months to decide.

And, lest we forget, 2013 and 2014 are the two years where the private housing market is expected to see significantly higher completions, that is, more supply at record numbers is on its way.

This is the “perfect storm” that some property analysts envisaged a couple of years ago that could hit the private housing market. Although interest rates have remained low, the new tax measures have an effect akin to a rise in rates as they both raise holding costs, and even more so for previously unoccupied units.

The still uncertain factor in the overall equation is the growth in the resident population size. The growth in new arrivals may be sufficient to mitigate the effects of the higher supply. However, if the Government has not been clamping down hard enough on new foreign arrivals, it faces even stronger pressure to do so now than it did two years ago.

For now, rentals may continue to be stable as investors ponder which course of action to take. But if rentals do fall, there will be less justification for home prices to remain high. Prices may eventually follow suit, but when this will occur is open to debate.

The region and the world are still awash with liquidity. Hot money will continue to flow this way, with Singapore being one of the few economies still holding an AAA rating.

On the increase in tax rates on owner-occupied properties, I am hard-pressed to understand the rationale for such a move. Because they are not linked to income, these taxes can be regressive in nature. Retirees are one group that is most vulnerable.

Why not keep a flat rate and keep the tax system easy to execute? It will not make a significant difference to the total tax revenue raised anyway.

If it is supposed to be a wealth tax, there are many more ways to tax the wealthy. For most single-property owners, that home is a result of hard work and years of savings. Do we need to penalise such efforts?

In any case, do most of these owners have a choice in avoiding such taxes? The decision to live in a particular location may have been made many years ago. Who could have guessed that an MRT station would open nearby?

If they choose to uproot now, they will lose their social and community ties. Will this lead to enclaves for those with higher incomes and others for those with lower incomes?

Finally, does the direction in taxes for owner-occupied properties mean that a lower-income household can never aspire to live in a convenient or central location? This is because these taxes can potentially drive them away — if not now, then in the not-too-distant future.

Colin Tan is Head of Research and Consultancy at Chesterton Suntec International.

[seletar]

http://www.todayonline.com/business/...orst-hit-curbs

TODAYonline
Property - 01 Mar 2013

High-end housing worst hit by curbs


SINGAPORE — The high-end housing segment will be most affected by the recent property curbs, Mr Kwek Leng Beng, Executive Chairman of City Developments (CDL), said yesterday, adding that “some correction” would be needed for the overall market.

Responding to a question on Budget 2013 and measures to cool the property market at CDL’s results briefing, Mr Kwek said: “The current economic crisis in Europe and global uncertainty create challenges to many countries. Some countries are addressing the widening income and wealth gaps.

“Singapore has looked into this issue and has moved forward to restructure its economy, making it sustainable in the longer term. The strategies mapped out by the Government will cause some pain before gain and, with its proven record, the private sector must come forward to support this move.”

The property cooling measures unveiled on Jan 11 include additional buyer’s stamp duty (ABSD), tighter loan-to-value limits and higher minimum cash down payments.

CDL reported its fourth-quarter net profit rose 52.8 per cent from the corresponding period a year ago, mainly due to robust sales and one-off gains. Net profit for the three months ended Dec 31 was S$249.3 million as revenue grew 22.8 per cent to S$886.4 million.

The one-off gains included profit on the sale of some property and an insurance settlement its Millennium & Copthorne unit received for a hotel in New Zealand that was closed after the February 2011 earthquake.

Net profit for last year fell 15.1 per cent to S$678.3 million, as revenue rose 2.2 per cent to S$3.35 billion.

CDL announced a special dividend of 5 cents per share, taking the total dividend for 2012 to 13 cents.

WITH AGENCIES

[seletar]

http://www.todayonline.com/business/...ptable-tharman

TODAYonline
Business - 02 Mar 2013

Some way to go before property prices are acceptable: Tharman


Analysts cautioned that it would take some time before it becomes clear how prices and demand have been affected by the recent cooling property measures. TODAY file photo


SINGAPORE — There are still “some ways to go” before property prices are at an acceptable level, Deputy Prime Minister Tharman Shanmugaratnam said in an interview with Bloomberg Television on Thursday.

“We’re still in a wrong part of the cycle,” he said, adding that bringing prices to an acceptable level will happen “through a combination of income improvement, as well as prices certainly not going up further, but some correction in prices will not be out of order”.

Mr Tharman’s comments come after the Government introduced a further round of property cooling measures in January to take more heat off the market, which has seen prices keep climbing upwards.

The impact of the measures has yet to be seen, with market watchers cautioning that it might not be until this month or April before it is clear how prices and demand have been affected.

Meanwhile, property analysts were divided on whether the Government might be inclined to introduce more cooling measures if prices continue to rise.

Noting that Mr Tharman said in his Budget speech that no effort will be spared to resolve the housing issue, Mr Steve Melhuish, Co-Founder and Group Chief Executive Officer of PropertyGuru, said: “The Government certainly won’t hesitate to intervene if the property market faces threats of a bubble similar to that of Hong Kong and China and there is a chance we could see more curbs if the market does not see an appreciable price correction.”

However, Mr Alan Cheong, head of research at Savills Singapore, said it is unlikely that the Government will add any further cooling measures in the foreseeable future, although Mr Tharman’s comments in the interview may act as a partial brake on the market as they indicate the Government is keeping a close eye on the situation.

Mr Colin Tan, Head of Research and Consultancy at Chesterton Suntec International, added that it appears that Mr Tharman’s chief concern is to make homes more affordable to Singaporeans.

“He is quite happy for this to happen via a rise in general incomes levels or a correction in property prices,” he said.

“I take this to mean that the cooling measures — both in the past and probably in the future — are not crafted simply to force a price correction but more to tame market sentiment.”

In the interview, Mr Tharman also said that the Government has to limit property price gains because of the social impact when people cannot afford to buy homes.

He added that “we can prevent a real bubble from being formed which then eventually crashes, and that’s our objective”.

[seletar]

http://www.todayonline.com/business/...nks-19th-month

TODAYonline
Business - 01 Mar 2013

Euro-area manufacturing activity shrinks for 19th Month


BRUSSELS - Euro-area manufacturing activity contracted for a 19th straight month in February as the currency bloc struggled to emerge from a recession, Bloomberg News reported on Friday.

A gauge of manufacturing in the 17-nation euro area was revised to 47.9, London-based Markit Economics said. That’s slightly above an initial estimate of 47.8 published on Feb 21. A reading below 50 indicates contraction.

The euro-area recession deepened in the fourth quarter as the economy recorded its worst performance in four years with a contraction of 0.6 per cent. Gross domestic product will decline again in the first three months before returning to growth in the second quarter, according to the median of 21 economists’ estimates in a Bloomberg News survey.

[seletar]

http://www.todayonline.com/business/...high-euro-zone

TODAYonline
Business - 01 Mar 2013

Inflation falls, jobless rate hits record high in euro zone


BRUSSELS - Inflation fell in the euro zone in February and joblessness rose to an all-time high, highlighting the impact of the bloc’s debt crisis.

Annual inflation in the 17 countries sharing the euro fell to 1.8 per cent in February from 2 per cent in January, the EU’s statistics office Eurostat said on Friday, within the European Central Bank’s (ECB) target of below but close to 2 per cent.

The unemployment rate rose to 11.9 per cent in January from 11.8 per cent in December, with another 201,000 people out of work, Eurostat said separately.

The sombre economic situation will likely weigh on the ECB’s Governing Council when it meets on March 7. While only a minority of economists see any early move to cut the bank’s benchmark rate below the current 0.75 per cent, consumer prices are no longer an issue.

“Inflation is just not a concern, it is not a reason why policymakers would hesitate to cut interest rates,” said Ms Sarah Hewin, head of European research at Standard Chartered Bank.

“They could move as early as next week, but there’s an element of the ECB wanting to keep its powder dry as we enter an uncertain political situation with Italy and the Cypriot debt question to be resolved.”

Economists polled by Reuters expected inflation to fall to 1.9 per cent. The reading compared to 2 per cent in January.

While the slowing pace of price increases may make it easier for Europeans to buy food and clothing, it is little comfort to the record 19 million people unemployed in the euro zone.

Three years of crisis have driven major euro zone economies, such as Italy and Spain, into a grinding recession, with businesses unable to obtain the financing they need to expand and citizens unable to earn enough to spend with confidence. - REUTERS

[seletar]

http://sbr.com.sg/residential-proper...estment-demand

Singapore Business Review
RESIDENTIAL PROPERTY | Staff Reporter, Singapore
Published: 02 Mar 2013

Here's how Budget 2013's new property taxes will hurt investment demand


Private properties to suffer the most.

Here's the full impact analysis from Knight Frank:

Rationale of the New Property Tax Policies

According to Knigh Frank, From the government’s viewpoint, a progressive property tax structure allows greater social equity without hurting economic competitiveness or reducing the incentives for enterprises. With an increase in the progressiveness of the property tax system and higher property tax rates for high-end residential properties and especially investment properties, the government is aiming to ensure social fairness. The property tax is a wealth tax and is applied irrespective of whether the property is lived in, vacant or rented out. Those who live in the most expensive homes should pay more property taxes than others.

Residential property prices have continued to rise over the last 2 years, with the URA All Residential Price Index posting a 9 per cent increase and the HDB Resale Price Index at 18 per cent as at 4Q 2012. Many middle and lower income groups are finding harder to secure an affordable home and this is becoming a bugbear for policy makers. The new property tax policies could hopefully control property prices by moderating property investment demand.

With the highest ABSD applicable for foreign homebuyers, the previous cooling measures have reduced foreign demand for properties in Singapore where the proportion of non-Permanent Resident buyers fell from 11.9 per cent in 2010 and 17.6 per cent in 2011 to only 6.3 per cent in 2012.

However, the residential property market remained buoyant with a continuous surge in developers’ sales volume in January 2013. The new tax policies target property investment demand in the long run as taxes are payable annually

Potential Impact on Property Market

This policy is akin to 'another shot' on top of the existing cooling measures, which could discourage purchase of private properties for investment purposes, while having a marginal impact on owner-occupied residential properties.

Under the new policies, property tax rate for non-owner-occupied residential properties and vacant residential properties are more than twice the rate for owner-occupied properties, given similar Annual Value (AV). For example, a property with AV of $60,000 will be subject to property tax rates of up to 5 or 6 per cent if it is occupied by the owners; or up to 13 or 14 per cent if it is leased out or vacant. In another case, a property with AV of $70,000 will be subject to property tax rates of up to 6 per cent if it is occupied by the owners and up to 15 per cent or 16 per cent if it is leased out or vacant.

In terms of property tax payable, investment properties will also see higher increase compared to owner-occupied properties. For example, a $12,000-AV property saw a decline of 33 per cent in payable tax quantum if it is owner-occupied but saw no change in payable tax quantum if it is leased out or left vacant. A property of $100,000 AV will experience 23 per cent tax increase under owner-occupation status and 40 per cent tax increase under investment status.

Holding costs for residential homes as an investment asset become higher with this new property tax regime. While ABSD is a one-off initial cost, property tax is an annual expenditure, which adds a fair bit of costs to highend home owners and investors.

The removal of property tax refund concession for vacant properties further discourages speculators and short-term investors who look for capital gains rather than long-term investment returns. These buyers can no longer claim tax refund by leaving their units vacant, and letting out is another way to mitigate holding cost with a rental income stream. With lease contracts varying from 1-year to 3-year term and coupled with initial fitting out costs, it might be more worthwhile for investors to hold their units over a longer period to plough back costs than flipping vacant units for quick capital gains.

[seletar]

http://www.todayonline.com/singapore...ding-spore-moh

TODAYonline
Singapore - 04 Mar 2013

SARS-like virus has low chance of spreading in S’pore: MOH


This undated image released by the British Health Protection Agency shows an electron microscope image of a coronavirus, part of a family of viruses that cause ailments including the common cold and SARS, which was first identified last year in the Middle East. Photo: AP

By Ng Lian Cheong , Olivia Siong


SINGAPORE — The Health Ministry has said that chances of the new SARS-like virus spreading in Singapore are low, especially since severe secondary infections among the close contacts of the cases is uncommon.

13 cases involving the novel coronavirus have been reported in the Middle East and United Kingdom since April last year.

The Health Ministry said it has not received any reports of such cases here.

It is also keeping close watch on the developments of the new virus, and working with the World Health Organisation and the international community to remain vigilant for the emergence of new cases of novel coronavirus infection.

All hospitals and clinics have been told to immediately report any suspicious cases.

This comes as Singapore remembers the SARS outbreak, which claimed 33 lives 10 years ago.

The memories remain vivid for healthcare workers who were on the front-line then.

Ms Vasanthi Palanivelu, patient service associate at Tan Tock Seng Hospital, said: “During the SARS period, 13 of us got infected and I was one of them. One of my nursing officers has passed on. We were sad for her but we took our courage to come back together. We never had any intention of running away from the work, as we’re really proud of being healthcare workers.”

Having been through the SARS outbreak in 2003 and the H1N1 pandemic in 2009, the Health Ministry said it has a whole-of-government national crisis management system in place with plans and capabilities to deal with a pandemic if one should occur. CHANNEL NEWSASIA

[seletar]

http://sammyboy.com/showthread.php?1...s-week-(Rumour)
Posted 04 Mar 2013

New property cooling measure will be announce this week. (Rumour)


Expected New MAS measure this coming Friday. It maybe touching on the MSR.

MAS is considering reviewing the Mortgage Servicing Ratio (MSR) for private property to be like HDB ruling. E.g. 30% mortgage servicing ratio.

Which could mean private property buyer can only use 30% of borrower's income to service the mortgage loan. E.g. If buyer income is $10k, max servicing loan monthly installment is $3k. HDB already implement this rule on 11 Jan 2013.

[seletar]

http://theeconomiccollapseblog.com/a...g-out-of-money

Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money

By Michael, on February 28th, 2013



Is "discretionary income" rapidly becoming a thing of the past for most American families? Right now, there are a lot of signs that we are on the verge of a nightmarish consumer spending drought. Incomes are down, taxes are up, many large retail chains are deeply struggling because of the lack of customers, and at this point nearly a quarter of all Americans have more credit card debt than money in the bank. Considering the fact that consumer spending is such a large percentage of the U.S. economy, that is very bad news. How will we ever have a sustained economic recovery if consumers don't have much money to spend? Well, the truth is that we aren't ever going to have a sustained economic recovery. In fact, this debt-fueled bubble of false hope that we are experiencing right now is as good as things are going to get. Things are going to go downhill from here, and if you think that consumer spending is bad now, just wait until you see what happens over the next several years.



Even though the Dow is surging toward a record high right now, everyone knows that things are not good for the middle class. A recent quote from CPA Howard Dvorkin kind of summarizes our current state of affairs very nicely...

"The fact of the matter is that America is broke — whether it's mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months' of savings," Dvorkin says."If you talk to people, most don't have two pennies."

These days most Americans are living from paycheck to paycheck, and thanks to rising prices and rising taxes, those paychecks are getting squeezed tighter and tighter. Many families have had to cut back on unnecessary expenses, and some families no longer have any discretionary income at all.
The following are 16 signs that the middle class is rapidly running out of money...

#1 According to one brand new survey, 24 percent of all Americans have more credit card debt than money in the bank.



#2 J.C. Penney was once an unstoppable retail powerhouse, but now J.C. Penney has just posted its lowest annual retail sales in more than 20 years...

J.C. Penney Co. (JCP) slid the most in more than three decades after the department-store chain lost $4.3 billion in sales in the first year of Chief Executive Officer Ron Johnson’s turnaround plan.

The shares fell 18 percent to $17.40 at 11:28 a.m. in New York after earlier declining 22 percent, the biggest intraday drop since at least 1980, according to data compiled by Bloomberg. J.C. Penney yesterday said its net loss in the quarter ended Feb. 2 widened to $552 million from $87 million a year earlier. The Plano, Texas-based retailer’s annual revenue slid 25 percent to $13 billion, the lowest since at least 1987.

How much worse can things get? At this point the decline has become so steep for J.C. Penney that Jim Cramer of CNBC is declaring that they are in "a true tailspin".



#3 In the United States today, a new car has become out of reach for most middle class Americans according to the 2013 Car Affordability Study...

Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city actually can afford the typical new vehicle.

The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales. According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year.

#4 The founder of Subway Restaurants, Fred Deluca, says that the recent tax increases are having a noticeable impact on his business...

"The payroll tax is affecting sales. It's causing sales declines," he said, estimating a decline of about 2 percentage points off sales at his restaurants. "There are a lot of pressures on consumers," Deluca said, adding "I think this is on the permanent side, but I think business will adjust to it."

#5 Many other large restaurant chains are also struggling in this tough economic environment...

Darden Restaurants, which owns the casual dining chains Oliver Garden, LongHorn Steakhouse and Red Lobster, said blended same-store sales at its three eateries would be 4.5 percent lower during its fiscal third quarter.

Clarence Otis, Darden's chairman and chief executive, said that "while results midway through the third quarter were encouraging, there were difficult macro-economic headwinds during the last month of the quarter."

"Two of the most prominent were increased payroll taxes and rising gasoline prices, which together put meaningful pressure on the discretionary purchasing power of our guests," he added.

#6 The CFO of Family Dollar recently admitted to CNBC that this is a "challenging time" because of reduced consumer spending...

At Family Dollar where the average customer makes less than $40,000 a year, the combination of a two-percent hike in the payroll tax, rising gas prices and delayed tax refunds has created a "challenging time and an uncertain time for the consumer right now," said Mary Winston, the company's chief financial officer.

"In our case, anything that takes money out of our customer's wallet gives them less money to spend in our stores," she told CNBC. "So I think all of those things create nervousness for the consumer, and I think there are sometimes political dynamics going on that they might not even fully understand the details, but they know it's not good."

#7 Even Wal-Mart is really struggling right now. According to a recent Bloomberg article, Wal-Mart is struggling "to restock store shelves as U.S. sales slump"...

Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”

This all comes on the heels of an internal Wal-Mart memo that was leaked to the press earlier this month that described February sales as a "total disaster".


#8 Electronics retailer Best Buy continues to struggle mightily. Best Buy just announced that it will be eliminating 400 jobs at its headquarters in Richfield, Minnesota.


#9 It is being projected that many of the largest retail chains in America, including Best Buy, will close down hundreds of stores during 2013. The following is a list of projected store closings for 2013 that I included in a previous article...

Best Buy
Forecast store closings: 200 to 250

Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125

J.C. Penney
Forecast store closings: 300 to 350

Office Depot
Forecast store closings: 125 to 150

Barnes & Noble
Forecast store closings: 190 to 240, per company comments

Gamestop
Forecast store closings: 500 to 600

OfficeMax
Forecast store closings: 150 to 175

RadioShack
Forecast store closings: 450 to 550


#10 Another sign that consumer spending is slowing down is the fact that less stuff is being moved around in our economy. As I have mentioned previously, freight shipment volumes have hit their lowest level in two years, and freight expenditures have gone negative for the first time since the last recession.


#11 Many young adults have no discretionary income to spend because they are absolutely drowning in student loan debt. According to the New York Federal Reserve, student loan debt nearly tripled between 2004 and 2012.


#12 The student loan delinquency rate in the United States is now at an all-time high. It is only a matter of time before the student loan debt bubble bursts.


#13 Due to a lack of jobs and high levels of debt, poverty among young adults in America is absolutely exploding. Today, U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.


#14 According to one recent survey, 62 percent of all middle class Americans say that they have had to reduce household spending over the past year.


#15 Median household income in the United States has fallen for four consecutive years. Overall, it has declined by more than $4000 during that time span.


#16 According to the U.S. Census Bureau, the middle class is currently taking home a smaller share of the overall income pie than has ever been recorded before.

Are you starting to get the picture?

Retailers are desperate for sales, but you can't squeeze blood out of a rock.

For much more on how the middle class is absolutely drowning in debt, please see this article: "Money Is A Form Of Social Control And Most Americans Are Debt Slaves".

But if you listen to the mainstream media, they would have you believe that happy days are here again.

Right now, everyone seems to be quite giddy about the fact that the Dow is marching toward an all-time high. And I actually do believe that the Dow will blow right past it. In fact, it is even possible that we could see the Dow hit 15,000 before everything starts falling apart.

But at some point, the financial markets will catch up with economic reality. It is just a matter of time.

In the meanwhile, those that are wise are taking advantage of these times of plenty to prepare for the great economic drought that is coming.

Don't be caught living paycheck to paycheck and totally unprepared when the next wave of the economic collapse strikes. Anyone that believes that this debt-fueled bubble of false hope can last indefinitely is just being delusional.

[seletar]

http://michaelsnyder.mensnewsdaily.c...s-almost-here/

12 Things That Just Happened That Show The Next Wave Of The Economic Collapse Is Almost Here

March 3, 2013

By Michael Snyder




Are we running out of time? For the last several years, we have been living in a false bubble of hope that has been fueled by massive amounts of debt and bailout money. This illusion of economic stability has convinced most people that the great economic crisis of 2008 was just an "aberration" and that now things are back to normal. Unfortunately, that is not the case at all. The truth is that the financial crash of 2008 was just the first wave of our economic troubles. We have not even come close to recovering from that wave, and the next wave of the economic collapse is rapidly approaching. Our economy is like a giant sand castle that has been built on a foundation of debt and toilet paper currency. As each wave of the crisis hits us, the solutions that our leaders will present to us will involve even more debt and even more money printing. And each time, those "solutions" will only make our problems even worse. Right now, events are unfolding in Europe and in the United States that are pushing us toward the next major crisis moment. I sincerely hope that we have some more time before the next crisis overwhelms us, but as you will see, time is rapidly running out.

The following are 12 things that just happened that show the next wave of the economic collapse is almost here...



#1 According to TrimTab's CEO Charles Biderman, corporate insider purchases of stock have hit an all-time low, and the ratio of corporate insider selling to corporate insider buying has now reached an astounding 50 to 1....

While retail is being told to buy-buy-buy, Biderman exclaims that "insiders at U.S. companies have bought the least amount of shares in any one month," and that the ratio of insider selling to buying is now 50-to-1 - a monthly record.

#2 On Friday we learned that personal income in the United States experienced its largest one month decline in 20 years...

Personal income decreased by $505.5 billion in January, or 3.6%, compared to December (on a seasonally adjusted and annualized basis). That's the most dramatic decline since January 1993, according to the Commerce Department.

#3 In a stunning move, Michigan Governor Rick Snyder says that he will appoint an emergency financial manager to take care of Detroit's financial affairs...

Snyder, 54, took a step he avoided a year ago, empowering an emergency financial manager who can sweep aside union contracts, sell municipal assets, restructure services and reorder finances. He announced the move yesterday at a public meeting in Detroit.

If this does not work, Detroit will almost certainly have to declare bankruptcy. If that happens, it will be the largest municipal bankruptcy in U.S. history.

#4 On Friday it was announced that the unemployment rate in Italy had risen to 11.7 percent. That was a huge jump from 11.3 percent the previous month, and Italy now has the highest unemployment rate that it has experienced in 21 years.


#5 The youth unemployment rate in Italy has risen to a new all-time record high of 38.7 percent.


#6 On Friday it was announced that the unemployment rate in the eurozone as a whole had just hit a brand new record high of 11.9 percent.


#7 On Friday it was announced that the unemployment rate in Greece has now reached 27 percent, and it is being projected that it will reach 30 percent by the end of the year.


#8 The youth unemployment rate in Greece is now an almost unbelievable 59.4 percent.


#9 On Saturday, hundreds of thousands of protesters filled the streets of Lisbon and other Portuguese cities to protest the austerity measures that are being imposed upon them. It was reportedly the largest protest in the history of Portugal.


#10 According to Goldman Sachs, bank deposits declined all over Europe during the month of January.





#11 Over the weekend, the deputy governor of China's central bank declared that China is prepared for a "currency war"...

A top Chinese banker said Beijing is "fully prepared" for a currency war as he urged the world to abide by a consensus reached by the G20 to avert confrontation, state media reported on Saturday.

Yi Gang, deputy governor of China's central bank, issued the call after G20 finance ministers last month moved to calm fears of a looming war on the currency markets at a meeting in Moscow.

Those fears have largely been fuelled by the recent steep decline in the Japanese yen, which critics have accused Tokyo of manipulating to give its manufacturers a competitive edge in key export markets over Asian rivals.

#12 Italy is an economic basket case at this point, and the political gridlock in Italy is certainly not helping matters. Former comedian Beppe Grillo's party could potentially tip the balance of power one way or the other in Italy, and over the weekend he made some comments that are really shaking things up over in Europe. For one thing, he is suggesting that Italy should hold a referendum on the euro...

"I am a strong advocate of Europe. I am in favor of an online referendum on the euro," Beppe Grillo told Bild am Sonntag.

Such a vote would not be legally binding in Italy, where referendums can only be used to repeal laws or parts of laws, but would carry political weight. Grillo has said in the past that membership of the euro should be up to the Italian people.

In addition, Grillo is also suggesting that Italy's debt has gotten so large that renegotiation is the only option...

In an interview with a German magazine published on Saturday, Mr Grillo said that “if conditions do not change” Italy “will want” to leave the euro and return to its former national currency.

The 64-year-old comic-turned-political activist also said Italy needs to renegotiate its €2 trillion debt.

At 127 per cent of gross domestic product (GDP), it is the highest in the euro zone after Greece.

"Right now we are being crushed, not by the euro, but by our debt. When the interest payments reach €100 billion a year, we’re dead. There’s no alternative,” he told Focus, a weekly news magazine.

He said Italy was in such dire economic straits that “in six months, we will no longer be able to pay pensions and the wages of public employees.”

And of course government debt has taken center stage in the United States as well.


The sequester cuts have now gone into effect, and they will definitely have an effect on the U.S. economy. Of course that effect will not be nearly as dramatic as many Democrats are suggesting, but without a doubt those cuts will cause the U.S. economy to slow down a bit.

And of course the U.S. economy has already been showing plenty of signs of slowing down lately. If you doubt this, please see my previous article entitled "Consumer Spending Drought: 16 Signs That The Middle Class Is Running Out Of Money".

So what comes next?


Well, everyone should keep watching Europe very closely, and it will also be important to keep an eye on Wall Street. There are a whole bunch of indications that the stock market is at or near a peak. For example, just check out what one prominent stock market analyst recently had to say...

"Every reliable technical tool is warning of major peaking action," said Walter Zimmerman, the senior technical analyst at United-ICAP. "This includes sentiment, momentum, classical chart patterns, and Elliott wave analysis.

"Most of the rally in the stock market since 2009 can be chalked up to the Federal Reserve’s attempt to create a ‘wealth effect’ through higher stock market prices. This only exacerbates the downside risk. Why? The stock market no is longer a lead indicator for the economy. It is instead reflecting Fed manipulation. Pushing the stock market higher while the real economy languishes has resulted in another bubble.

"The next leg down will not be a partial correction of the advance since the 2009 lows. It will be another major financial crisis. The worst is yet to come."

Sadly, most people will continue to deny that anything is wrong until it is far too late.

Many areas of Europe are already experiencing economic depression, and it is only a matter of time before the U.S. follows suit.

Time is running out, and I hope that you are getting ready.

So what do you think?

How much time do you believe that we have left before the next wave of the economic collapse strikes?

[bargain hunter]

seems like market speculation on this measure is very strong. i even received an sms from an agent speculating on this.

ahead of 5 (or more?) launches in march:

Trilliniq, the sennett, d'nest, bartley ridge, urban vista. did i leave out any?

http://sammyboy.com/showthread.php?1...s-week-(Rumour)
Posted 04 Mar 2013

New property cooling measure will be announce this week. (Rumour)


Expected New MAS measure this coming Friday. It maybe touching on the MSR.

MAS is considering reviewing the Mortgage Servicing Ratio (MSR) for private property to be like HDB ruling. E.g. 30% mortgage servicing ratio.

Which could mean private property buyer can only use 30% of borrower's income to service the mortgage loan. E.g. If buyer income is $10k, max servicing loan monthly installment is $3k. HDB already implement this rule on 11 Jan 2013.

[indomie]

seems like market speculation on this measure is very strong. i even received an sms from an agent speculating on this.

ahead of 5 (or more?) launches in march:

Trilliniq, the sennett, d'nest, bartley ridge, urban vista. did i leave out any?

Now even if u have a fair amount of cash stash.... U cannot borrow above your pay grade.