http://www.businesstimes.com.sg/arch...y-island-condo

Published June 02, 2012

A Porsche for a Chery, an island for a condo

Ever wondered what your S'pore assets would fetch in a global barter marketplace?

By Joyce Hooi


ONE man's Chery QQ is another man's Porsche Boxster Black Edition - if the Porsche man were shopping for a car in the United States, that is.

Soaring Certificate of Entitlement (COE) premiums and a robust Singapore dollar have made the cheapest passenger car here - the manual Chery QQ 0.8 - the equivalent of most European luxury badges elsewhere.

Even at a promotional net price of S$74,988, the Chery QQ gets you the Porsche Boxster Black Edition at US$55,200 in the US. If it is any comfort, the Black Edition's drawback is the literal application of Henry Ford's motto - it only comes in black - while the Chery QQ comes in a cheerful orange.

Three weeks ago, the Chery QQ's normal selling price of S$94,988 would have priced it into the luxury car market in the toppermost of the poppermost of cities - Hong Kong, where an Audi A6 2.8 FSI quattro costs slightly less at HK$560,000.

At S$94,988, the QQ's price tag is more COE than car - the S$58,001 premium for Category A cars at last count makes up 61 per cent of the final retail price.

But it is when you reach for the larger cars in Category B that you hit the supercar leagues overseas. The BMW 520i, a best-selling model, goes for S$250,800 as of its May price list - enough to get you a Ferrari in the US.

With Cat B premiums at $85,216 from the last bidding round, the BMW's price is 66:33 car-to-COE - practically the inverse situation of Cat A cars. Little wonder that the larger luxury cars have dealt humbler ones a spirited walloping.

Toyota used to easily outsell every other brand in the market. As recently as 2009 when it took pole position, 17,555 new Toyotas were registered - or 1,463 cars a month. Last year, just 297 Toyotas a month were registered.

There is little cause to have a complex if you're a Toyota man, though. A Toyota Corolla Altis here is the equal of a Jaguar XFR in the US.

There is little telling where this might go - the government's efforts to relieve the COE supply squeeze might be stymied by a lower vehicle deregistration rate.

A place to hang your hat

Comparisons of property, however, had more nuanced results. Trying to buy something with the budget of a resale HDB flat can be a geographical lesson in economic hardship.

While it is possible to get a villa with the median price of a four-room flat, the villas tend to be in Portugal, Greece and Spain - countries on the receiving end of eurowoes. Getting a villa in Italy that was more luxury than lean-to was impossible - for now, anyway.

A five-room flat in Bukit Batok might get you a mansion in Georgia, US - but you would have to buy it from someone who could not afford to keep it. Georgia was ranked fourth in the foreclosure stakes in February. Then, five years after the subprime crisis, one in every 331 households in Georgia filed for foreclosure.

Bargain hunters looking for a second home with a whirlpool and hardwood floors should note that Nevada has the highest foreclosure rate. It also has the highest unemployment rate - 11.7 per cent as of April.

European property might be even cheaper in coming months. "There are few signs to boost the confidence of European householders," Knight Frank's Kate Everett-Allen noted in a report.

When private housing is considered, fantasy locations overseas start looking more upmarket. A private apartment with the median size of 743 square feet at S$966,000 from this year's first quarter buys an island in the Caribbean more than 500 times larger, with two houses thrown in.

City life, however, is more of a squeeze. In London, the same amount fetches 390 square feet - much smaller than the shoebox apartments CapitaLand CEO Liew Mun Leong called "inhuman" last week.

City-on-city, buyers for prime property here have it easier. At end-2011, a Knight Frank report found that prices of prime residential property here grew 29 per cent from 2007, compared to a 60 per cent increase in Hong Kong and a 96 per cent jump in Shanghai.

The price of everything and the value of nothing

Singapore tends to find itself on most-expensive city lists because of housing and transport. Food, however, which has the highest weightage in the consumer price index after housing, fares better.

Numeo, a website that collates data on global prices, ranked Singapore 35th out of 90 countries in its restaurant price index - above Puerto Rico and Latvia. With a score of 65.1, eating in Singapore is about 35 per cent cheaper than in New York City with a score of 100. In comparison, the most expensive country in which to dine, Norway, has a score of 150.23.

Other things, like taxes, are not in price indices, but are important. Singapore has among the world's lowest individual income tax rates, ranging from 3.5 to 20 per cent. Cars and gasoline in the US are a penny a pound, but its tax rate ranges from 15 to 35 per cent.

The goods and services tax (GST) rate - at 7 per cent - pales in comparison to the UK's value added tax rate of 20 per cent. In Greece, where a villa can be picked up on the cheap, the VAT is a crippling 23 per cent.

Interestingly enough, Singapore is one of the cheapest countries in which to buy the new iPad. The cheapest model went for US$526.85 at the online Apple store last month. Buyers in Europe had to pay at least US$600. For most, this will have to be consolation enough if house and horsepower remain out of reach.