Report warns leaders ‘need to work harder to keep costs in check’ for Singapore to stay as regional wealth hub

SINGAPORE: A June 28 (Wednesday) Reuters report pointed out that, unlike the rest of the world, property prices in Singapore have remained high, and this may affect the country’s aim of being a financial hub in the region.

Singapore’s leaders face the unique challenge of keeping the public happy amid high inflation and housing rates, plus keeping the city-state attractive for the world’s ultra-wealthy to bring in investments that would create jobs.

“The stakes of keeping everyone happy are high,” the report from Reuters reads.

“Singapore needs to do more to change perceptions if they are not reality. Its leaders are elected by its citizens and that means the city’s ambition as a financial hub depends on keeping the public onside more than other centres like Dubai and Hong Kong.”

Earlier in June, Singapore emerged as the world’s most expensive city for luxury living this year, topping the Lifestyle Index of Swiss wealth manager Julius Baer Group Ltd for the first time after coming in fifth in 2022.

There are many factors contributing to the spike in property prices. One, delays in construction due to the Covid-19 pandemic. Two, a greater demand as more people work from home.

But Reuters adds that interest in living and working in Singapore has increased recently, partly due to heightened tensions between the US and China.

Leaders are well aware of the housing issue, with more land being redeveloped for this purpose and higher taxes on locals’ second homes. Significantly, foreigners buying property now have the highest levy in the world, at 60 per cent, even though their purchases only account for 4 per cent of the total.

However, the sales of new private homes for May in Singapore reached a 12-month peak, despite higher taxes that went into effect in April in a bid to cool the property market.

However, with no new home launches in June, sales are expected to be considerably lower. /TISG

New home sales reach 12-month high due to launches in Geylang, Bukit Timah