AMID signs of an economic recovery, a survey by OCBC Bank has found that three in five people here are confident about what 2010 will bring.

The survey on ‘Singaporeans’ Resolutions and Goals’ also found that three in four people see a stronger economy this year.

Respondents were overwhelmingly positive – only 10 per cent are worried about how things will work out in 2010.

Three in five said they intend to focus more on saving – a possible reaction to the financial tumult of 2008 and 2009.

The top three resolutions for 2010 were found to be spending more time with the family, improving health and fitness, and travelling to more or new destinations.

Thirty per cent of respondents said they would spend more money on their family, while 40 per cent said they would not change their spending on family needs.

These findings imply that the family is the top concern here, with health and fitness coming in second.

Bucking the trend of general high hopes, 38 per cent of retirees surveyed said they are apprehensive about the future.

Their chief concerns include future security, especially with rising life expectancy, medical costs and few or no children to depend on for financial support.

Source: Business Times, 7 Jan 2010

With the S’pore economy on the mend, there are more pressing issues for analysts than how the final growth number will pan out

IN a year when the official growth forecast was slashed three times and then raised twice, with the market forecasts mostly in tow, all eyes were on how far the economy would sink in what looked to be its deepest recession on record.

As it has turned out, the GDP contraction in 2009 was (or is currently estimated at) 2.1 per cent, which just numerically is not as bad as 2001′s 2.4 per cent shrinkage.

In fact, one of the more gung-ho private sector economists believes that when the numbers are finalised next month, the 2009 contraction could prove to be a ‘mere’ 1.5 per cent – a far cry from the doomsday projections of 6 to 9, even 10 to 12, per cent plunges at the height of recessionary anxieties about 10 months ago.

If so, the annual contraction in what was widely feared to be a debilitating recession would turn out to be comparable – just numerically – with the downturns in 1985 and 1998, when the economy shrank 1.4 per cent in each case.

Still, lest we forget, even if the annual contraction is not the sharpest on record, the 2009 recession did live up to its ‘deepest’, ‘sharpest’ hype – and almost ‘most protracted’ too.

The quarterly contractions – 9.4 per cent year on year in Q1 last year, and 16.4 per cent sequentially in Q4 2008, followed by another 11.5 per cent fall in Q1 2009 – surpassed the highs (or is it lows?) in previous recessions.

One-tenth and more of the economy was lost in one fell swoop. And the four-quarter stretch of sharp sequential declines from Q2 2008 matches, in duration, that in the 1998 downturn. The only saving grace of the latest recession is the relatively smaller number of jobs lost.

Forecast for 2010

In any case, with all the economic tumult last year, interest in the GDP growth figures was more than apparent enough, if not for first clues on when the recession would end.

Even now, with recovery on the cards, economists are, it seems, falling over themselves trying to outdo the official 3 to 5 per cent growth forecast for 2010.

Of course, whether the economy grows 3, 5 or 7 per cent this year is not at all irrelevant, not least to civil servants whose bonuses are tied to GDP expectations.

But now that the economy has, by all indications, turned the corner, the exact growth figure going forward – so long as it’s solid growth of at least 3 to 5 per cent, and no further dip – is arguably not the most pressing or even piquant issue of the day.

Just as, during a recession, it’s rather more important to identify the economic turnaround than to foretell with pinpoint accuracy the growth pace for the quarter or year.

What might be the more pressing issues, apart from the hope of no further economic dips and shocks? A good number of challenges at hand, as it turns out – some of which the Economic Strategies Committee has been looking into as it charts a blueprint for sustained and inclusive economic growth.

Medium-term concerns

Citigroup economist Kit Wei Zheng recently highlighted in a report a few burning issues – including how an economy fuelled in recent years by a strong influx of foreigners would cope with any tightening of immigration policy, as well as the old bugbears of a growing income divide and the need for demand diversification.

These are concerns over the medium term. More immediate at hand is the possible return, with the GDP numbers now back in the black, of a recent spectre – inflation – and the implications for the strength of the Singapore dollar.

And, indeed, in a quick reversal of circumstances, the return of growth brings with it, too, a likely return of labour tightness and, once again, wage pressures. All that, plus the ever-present angst and anxiety over demand, supply and prices in the property market, and the makings of a bubble.

There’s surely a whole lot of more pressing stuff for analysts and economists to mull over than merely to predict the year’s GDP growth number.

Source: Business Times, 7 Jan 2010

Outlook for this segment positive as it still has room to move up

LUXURY homes continued to sell well right to the end of 2009, updates from two developers show.

Malaysia-based YTL Corporation has sold six of the 13 villas at its Kasara project at Sentosa Cove, at prices ranging from $14 million to $22 million. This works out to about $1,600 per sq ft on average.

And on the mainland, CapitaLand has sold 60 apartments in the 165-unit Urban Suites condominium in the Cairnhill area, at prices ranging from $2,400 to $2,700 psf.

YTL sold the six villas in November and December through private previews. It will officially launch the remaining seven villas tomorrow.

CapitaLand started preview sales in Singapore for phase one of Urban Suites – on the former Char Yong Gardens site in Hullet Road – just before Christmas. Sixty units were released in phase one and sold to buyers prepared to purchase more than one.

CapitaLand, which is developing the project with Wachovia Development Corporation, plans to launch the second phase, comprising about 50 units, in Jakarta next week.

Both CapitaLand and YTL say the brisk sales indicate the luxury market is picking up.

‘The successful launch of Urban Suites is testament to buyers’ confidence in the fundamentals of the Singapore economy and the growth potential of the high-end property segment,’ said Patricia Chia, chief executive of CapitaLand’s residential arm.

YTL Singapore director Kemmy Tan said: ‘The mass market segment was the key driver last year, so the luxury segment still has room to move up. We are very positive on the outlook for 2010.’

At Kasara, selling prices will be bumped up slightly with the official launch. The villas, which range from 9,000 sq ft to more than 14,000 sq ft, will now be sold for an average $1,700 psf.

They were designed by DP Architects and aim to combine Asian architectural style with European interiors and fittings.

YTL said the six homes sold so far have been bought by Singaporeans and foreigners from the Asia-Pacific and Europe. Sentosa Cove is the only place in Singapore where foreigners can own landed property without special permission.

Over at Urban Suites, about two-thirds of the buyers are foreigners from countries including China, Australia and Canada. Most buyers bought two units, CapitaLand said.

It gave a one per cent discount to buyers who picked up more than one unit. Buyers have a choice of two, three and four-bedroom apartments as well as duplex and triplex penthouses. The units range from 1,044 sq ft to 4,715 sq ft.

Analysts say CapitaLand can be expected to raise prices for subsequent phases.

In a note yesterday, DBS Group Research analyst Adrian Chua said the prices achieved for the 60 units transacted so far exceed his expectation of $2,400 psf. ‘We continue to advocate going for the high-end property developers,’ he said.

Source: Business Times, 7 Jan 2010