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Thread: Downturn may see decline in non-resident population

  1. #1
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    Default Downturn may see decline in non-resident population

    http://www.straitstimes.com/Singapor...ry_334360.html

    February 5, 2009 Thursday

    Downturn may see decline in non-resident population

    By Kor Kian Beng


    THE explosive growth in the proportion of foreigners here will slow and their numbers may even dip as the economy contracts this year.

    But continuing to shut them out when things get better will not be in Singapore's long-term interest, said Deputy Prime Minister Wong Kan Seng in Parliament on Tuesday.

    Responding to Madam Ho Geok Choo (West Coast GRC) on population trends and immigration policies, he said that when the economy grew strongly over the past few years, Singapore's non-resident population rose to meet the man-power needs, especially in labour-intensive industries like construction.

    'As we enter into a period of economic contraction, our non-resident population is unlikely to grow at the same rate as in the past. The current proportion of non-resident population of 25 per cent may decline,' he added.

    Mr Wong, who is Home Affairs Minister, cited figures from the Population Trends 2008 which showed that as of last June, 65 per cent of the 4.84 million population were Singaporeans, while 10 per cent were permanent residents (PRs).

    The remaining 25 per cent were referred to as the non-residents - mostly transient foreigners working, studying and living here. They numbered 1.2 million last June - a spike of 19 per cent over the previous year.

    The jump showed that Singapore's foreign manpower needs are highly dependent on the economy, said Mr Wong.

    Madam Ho asked about the employment scene, particularly measures to address concerns among Singaporeans over job competition from foreigners in the downturn.

    Mr Wong's response: 'For the Government, Singaporeans' interests must come first. But excluding foreigners from coming here to work when there's a legitimate need for companies to hire them will be against our long-term interests.'

    He added that Singapore had to consider all factors needed to keep its economy competitive. It could not follow blindly what other countries did in their immigration policies. This is especially if foreign manpower is needed to keep companies going, when they are competing with foreign companies, or to keep companies cost-effective.

    Mr Wong also listed various programmes to assist Singaporeans, including the Workfare Income Supplement scheme, which gives an income boost to low-wage workers.

    He also said that immigration was still needed to boost the population. Singapore's total fertility rate was 1.29 last year - far from the 2.1 replacement rate.

    But he added: 'This will be done on a selective basis, taking in consideration the contributions or potential contributions of the immigrants to our economy.'

    Over the last five years, 58,000 PRs became citizens, while 242,000 were added to the PR pool. This growth underscored the importance of integrating new citizens and PRs into society here so that communal bonds will be fostered and social cohesion enhanced, said Mr Wong.

    The Government is working on a proposal to further help the integration process. More details will be announced during the debate on the budget for individual ministries.

  2. #2
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    I look at it as one of the biggest factor to bring the property price down.....

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    How long do I have to wait..sigh..
    Been nearly a year waiting for the price to correct...

    wait until Neck long long ....

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    Quote Originally Posted by focus
    How long do I have to wait..sigh..
    Been nearly a year waiting for the price to correct...

    wait until Neck long long ....
    Unless FT policy no more..impossible.
    Property price will not crash but slight drop, because :

    1) Majority buyers from 2002-2006 are local, their property in handsome profit now, no hurry to sell.
    2) Majority buyers from 2006-2008 are rich PR/Foreigner, they got strong holding power, no hurry to sell.

    You cant find any panic selling currently right ? That's the reason.

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    Quote Originally Posted by sun
    Unless FT policy no more..impossible.
    Property price will not crash but slight drop, because :

    1) Majority buyers from 2002-2006 are local, their property in handsome profit now, no hurry to sell.
    2) Majority buyers from 2006-2008 are rich PR/Foreigner, they got strong holding power, no hurry to sell.

    You cant find any panic selling currently right ? That's the reason.
    Can I ask you three questions..
    1) You mean all of the buyers mentioned above bought with full payment upfront and do not need to service installment?
    2) For those who need to service installement, would the rent be enough to cover the installment?
    3) For those who are renting out to service the installment, would the reduction in foreigners have an impact on the rent? Which would lead to competition for landlords to rent -> which will result in reduction in rent -> which will mean the rent might not cover the installment?

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    Quote Originally Posted by focus
    Can I ask you three questions..
    1) You mean all of the buyers mentioned above bought with full payment upfront and do not need to service installment?
    2) For those who need to service installement, would the rent be enough to cover the installment?
    3) For those who are renting out to service the installment, would the reduction in foreigners have an impact on the rent? Which would lead to competition for landlords to rent -> which will result in reduction in rent -> which will mean the rent might not cover the installment?
    1) Of course not. But there exists quite a number of people who have paid up or can afford to pay up the loans if need be. I myself know at least 5 people who have paid up, or have the money to pay up but are taking loans to free up their cash for other investment opportunities yielding higher than their loan interest.

    2) You're assuming everyone needs to rent out their property in order to afford the installments. I think Singapore property buyers are quite a kiasee bunch, who will not buy property unless they can well afford it, either the monthly installments or paying in full. But if the top 20% of Singaporean earners start losing their jobs, then we might see a different picture, as these are the typical profiles of condo owners.

    3) Yes. But do you know something, in the years before 2007's rental price boom, monthly rentals were usually never enough to cover installment. Now we are just going back to the old days before 2007. And that has never stopped the majority of property owners from paying their installments on time.

    The MAS has done a good job in Singapore with their rules on credit-worthiness and loans. That's why while the USA and Europe has experienced a shock with subprime loans and the soon-to-come credit card defaults, Singapore will be in relatively good state. Any defaults with home loans and credit cards will be a drop in the ocean for Singapore banks.


    Lastly, may I add that the majority of owners of luxury properties are not Singaporean. By luxury properties I do not only mean condos in prime districts, but those huge units costing $5-$10 million each. That is why those particular condos have seen huge price falls with most owners losing on paper $1 to 2 million or more already. Those that have actually realised their losses (ie- transacted at substantial loss) are few compared to those still holding, according to the stats published by the relevant authorities.

    Most Singaporean-owned condos are of a more humble nature, usually costing less than $2 million, many costing less than $1 million, and usually located in less glamourous areas. These weren't expensive condos to begin with, and I believe that, short of a huge catastrophe hitting Singapore that will put the top 20% Singaporean earners out of jobs, they can well afford to service their loans.

    What is the average income for the top 20% Singaporean earners? I believe it was published somewhere recently, may even be published on this forum. Servicing a few thousand dollars of combined loan every month does not pose a problem for these people, if they keep their jobs.

    Now we have to look at those owners of yet-to-TOP properties in certain locations that were hot back in 2007. Those people bought on deferred payment scheme (DPS) and many of them were speculators. If I remember correctly, these properties are located in the City Fringe and especially in East Coast. Not so many located in D9, 10, 11 as if I recall correctly many of those developers holding to those prime sites refused to launch and were waiting for higher prices. Those that were launched in prime districts at peak prices were marketed to foreigners, means big units and out of reach for most Singaporeans.

    To surmise, this is my guess:

    - Soon-to-TOP properties in City Fringe and East Coast may crash as most owners bought on DPS. Banks unwilling to loan 80% of unit's price now, and owners' credit worthiness may not be there as they were speculating. If unemployment rises, these 2 areas might see some substantial fire sales. Why these 2 areas? If you recall, the media and the real estate people were relentlessly pumping up these 2 areas as the next big thing, and many speculators went for it big time.

    - Prime districts luxury units have already fell a lot from their peak, some more than 40% (?) or some such substantial loss. Smaller units (non luxury class) in prime districts have also seen their values plummet some 20-30% for example in River Valley and Newton. With rents dropping, those expats that remain in Singapore will surely take advantage of the lower rents to move back into D9,10,11. This will support the rental market for this area, and hence transaction price for this area.

    This is just some of what my humble intellect can reason at, there could be many other factors involved, so please be patient if you disagree.

    Do note the generalisations above.

  7. #7
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    From what I feel, it is not so much the job losses or low rentals that will make property prices crash even more. If I noticed correctly, the profile of people who are losing their jobs or cannot find jobs hardly fit the bill of the typical condo owner/dweller. This one point I believe to be true as Singapore banks will not extend a private property loan to you in the first place if you were a high-risk case.

    If prices crash, it will be due to the speculators who bought on DPS but did not take loan then because they thought they could sub-sell, and are now peeing their pants.

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