Home News Featured News Singapore's 'rich-but-not-really-rich'

Singapore’s ‘rich-but-not-really-rich’




- Advertisement -

By: Kheng-Liang Tan

This morning, Bloomberg ran an article on how Singapore’s supposedly middle-class have been classified as ‘rich’ because of artificially-inflated property prices and this has in turn caused some possibly bad investment choices.

Based on current banking practices and legislation, only investors with a 1) minimum assets of S$2 million and 2) income above of S$300,000 in the past 12 months income are classified as ‘accredited-investors’.

This requirement could be misleading given that inflated property prices in the recent years has put many condominium owners in this category. With an “accredited-investor” status, this group is able to invest in risky products.

- Advertisement -

Such a status allow them to purchase riskier financial products that may not be available to retail inveators. Nevertheless, these products may carry risks that are not be fully appropriate to the ‘real’ financial status of these investors.

A/Professor Christopher Chen from SMU said, “if someone happens to own a landed property, likely that person will become an accredited investor… some people are semi-rich, or look rich on paper.”

An Elaine Tham – who fell into the definition as she lived in a condo – invested $250,000 in Swiber Bonds. Swiber went into Judicial Management last month and the money she had set aside for her children’s education is now likely to be lost.

Lawyer Robson Lee echoed the view of Chen above, saying that while these people are “wealthy by technical definition.. in reality they may not have enough disposable assets to withstand such losses”

Currently, such a status seem to be automatically assigned, although MAS said in response to Bloomberg queries that they are considering preventing banks from assigning such status to investors whose wealth is in property and an opt-out option.

Another investor who lost money in the Swiber bonds said, “Who would understand the full consequence of being an accredited investor? It can be a grey area.”

Banker Chris Kuan said: that is was worrying that “so much household wealth are tied in property – surely an extremely risky macro-economic proposition in which real estate prices are intertwined with fiscal policy, household wealth, retirement and healthcare funding – all of which works only because the government control the land bank and maintain elevated prices..”

 Follow us on Social Media

Send in your scoops to news@theindependent.sg 

No tags for this post.
- Advertisement -

Local nurse says it is ‘sad, really sad to know’ that frontliners like himself are being blamed for the current Covid-19 outbreak

Singapore -- A local nurse took to social media with a heartbreaking tweet about frontline healthcare workers like himself being blamed for Covid-19 now after being cheered as heroes when the pandemic began last year. In a tweet which has since been...

Netizens upset with ST’s piece on people’s behaviour and Covid measures

Singapore—An article entitled “Behaviour of people holds key to success of Singapore's tighter Covid-19 measures” written by the Senior Heath Correspondent of The Straits Times has been met with unhappy reactions from netizens.   Ms Salma Khalik, whose piece was published on...

‘Stop the double standards,’ says PAB rider after seeing LTA officers let off an errant rider

Singapore – “PAB (power-assisted bicycle) rider doing food delivery? You’d better just dress like you look like an Aunty because LTA (Land Transport Authority) will not issue you a ticket,” said a member of the public after witnessing the authorities let...
Follow us on Social Media

Send in your scoops to news@theindependent.sg 

No tags for this post.