Cost of living in Singapore

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Grab and Gojek extend fare hike, ComfortDelGro to levy surcharge for rides from Mandai parks​

Grab and Gojek said the fee is necessary to provide stability to drivers’ earnings. PHOTO: LIANHE ZAOBAO

Clement Yong

Jul 25, 2022

SINGAPORE - Both Grab and Gojek on Monday (July 25) confirmed they will extend their fare hikes until Dec 31, taking their cue from other taxi companies which announced similar moves last week.
In separate replies to The Straits Times on Monday, the two transport operators said the price of fuel remains unstable, and that the fee is necessary to provide stability to drivers’ earnings.
Both said the hike, called a driver fee, will go fully to the drivers. Grab’s fee is an extra 50 cents for all trips, while Gojek’s is 50 cents for trips less than 10km and 80 cents for those longer.
Gojek’s general manager Lien Choong Luen said: “With costs of living continuing to rise and the macroeconomic situation remaining uncertain, the extension will provide much needed earnings protection and security.”
A Grab spokesman attributed the extension to “ongoing high fuel prices”. “We will continue to monitor the situation,” the spokesman added.
Gojek’s fee was imposed in March and Grab’s in April to help drivers cope with rising pump prices. In May, they were extended to July.
Operators ComfortDelGro, Trans-Cab, Strides Taxi and Prime Taxi have all said their fuel-related fare hikes will continue until December, amid rising demand for taxis and private-hire cars with the relaxation of Covid-19 restrictions.

While pump prices have dipped, sliding three days ago to their lowest in four months, operators have pointed out that prices are still much higher than they were last year, and analysts have said that energy prices will continue to stay up.
Separately, taxi rides from the Singapore Zoo, River Safari and Night Safari from August will cost $3 more, after reports of people having trouble getting taxi rides surfaced.
In a Facebook post on Monday, ComfortDelGro said the surcharge will apply to all trips from the taxi point of the Mandai parks between 4pm and 11.59pm every day, from Aug 1 to Dec 31.
The Straits Times understands that the Mandai parks also have similar arrangements with other taxi operators.
It is a similar move that Changi Airport Group has made for taxi trips starting from the airport, in what could be a new tactic to attract more drivers to far-flung tourist hot spots as travel resumes.
Associate Professor Raymond Ong of the National University of Singapore said it is likely that there could be more of such places with surcharges, especially now that drivers are consciously making a decision about where to pick up passengers.
Drivers want a “passenger trip chain”, where they can pick up one person after another without much waiting. “It seems that this could be a norm. (Right now), there is less incentive for drivers to pick up passengers in places that are out of the way,” he added.

 

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Condo resale prices rise for 24th straight month in July, volume falls 30.7% year on year​

Condo resale prices rose at a quicker pace of 1.2 per cent last month compared with June's 0.8 per cent. PHOTO: ST FILE

Isabelle Liew


AUG 10, 2022

SINGAPORE - Prices of resale condominium units edged up for the 24th straight month in July, while transactions dipped amid rising interest rates.
Condo resale prices rose at a quicker pace of 1.2 per cent last month compared with June's 0.8 per cent, according to flash figures from real estate portals 99.co and SRX released on Wednesday (Aug 10).
Compared with July last year, prices were up by 9.8 per cent, data showed.
Meanwhile, the resale volume fell by 6.7 per cent, with an estimated 1,248 units changing hands in July, down from 1,338 units in June.
Resale transactions declined by 30.7 per cent compared with July last year but were still 4.4 per cent higher than the five-year average for the month of July.
Property analysts attributed the dip to a mismatch in price expectations between buyers and sellers, driven by rising mortgage rates.
Some buyers may not be willing to match some sellers’ asking prices, given the uncertainties surrounding global economics, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

“On the other hand, sellers have no pressure to cut prices. Some sellers still expect prices to rise further, given the robust housing demand from Housing Board upgraders and supply lag in the suburbs,” she added.
One Global Group senior analyst Mohan Sandrasegeran said the decline could be due to the launch of AMO Residence, which likely stimulated the interest of buyers and investors towards the new launch market.
The 372-unit Ang Mo Kio development, which is the first major private residential project in the estate in more than eight years, sold over 98 per cent of its units during the launch on July 23.
Last month, condos in the suburbs accounted for 59.1 per cent of total condo sales volume. Homes in the city fringes accounted for 24.6 per cent, while the remaining 16.3 per cent were in core central Singapore.
PropNex Realty head of research and content Wong Siew Ying said that HDB upgraders and owner occupiers have helped to drive sales and prices in the suburbs, as some buyers look to the mass market for more affordably priced private condos.
She said: “Generally, we expect would-be buyers with a tighter housing budget to continue to tap the resale market for buying options amid firm new launch prices and rising interest rates.”

Ms Wong added that the demand will help to prop up resale prices this year.
“However, we anticipate the price growth to be gradual and buyers to remain watchful of mortgage rate hikes,” she said.
Mr Sandrasegeran also noted that resale condo prices are being driven up by HDB upgraders, foreign buyers and high value purchasers.
“In July, at least five resale condo purchases exceeded the $10 million threshold, compared with just two deals in June, according to data from URA Realis,” he said.


The highest transacted price for a resale condo in July was $22.28 million for a unit at Le Nouvel Ardmore, a luxury freehold development in the Tanglin area.
In the city fringes, the highest transacted price was $5.5 million for a 99-year leasehold unit at Echelon in Alexandra.
In the suburban areas, a 99-year leasehold unit at Double Bay Residences in the Tampines area sold for $3.4 million.

 

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Bus and train fare formula to be reviewed; any changes will be applied next year​

Any changes to the public transport fare adjustment formula and mechanism will be applied in 2023, said the PTC. PHOTO: ST FILE

Kok Yufeng
Transport Correspondent

Aug 15, 2022


SINGAPORE - The way that bus and train fares are calculated will be reviewed to account for changes in commuting patterns, and to balance fare affordability and the financial sustainability of the public transport sector.
The Public Transport Council (PTC) said this on Monday (Aug 15) as it announced the start of its review process, aiming to complete it by the first half of next year.
Any changes made to the public transport fare adjustment formula and mechanism will be applied to the fare review exercise in 2023, the PTC added.
It will be consulting commuters, public transport operators, the labour movement and transport experts for the review.
The current formula will remain for the upcoming fare review later this year.
The formula puts a cap on how much public transport fares here can be adjusted each year. It comprises five component indicators that take into account core inflation, energy prices, wage increases, productivity and the network capacity of the public transport system.
The formula is typically reviewed once every five years, said the PTC, which is led by Nominated MP Janet Ang, and comprises 16 other members from academic institutions, business, grassroots organisations, labour unions and professional services who are appointed by the Ministry of Transport (MOT).

The last time there was a formula review, the network capacity factor (NCF) was introduced in 2018 to better reflect operating costs borne by public transport operators due to capacity adjustments - such as running more trains and buses over longer distances for less crowded and more convenient rides, for instance.
The PTC on Monday laid out the terms of reference for its latest review.
It will first look at the effectiveness of the current fare formula, in consideration of the changes in the public transport industry and commuting patterns.


Last year, former PTC chairman Richard Magnus highlighted the growing phenomenon of people working from home, but said then that the long-term trend is still not clear.
Due to Covid-19, public transport ridership in Singapore fell to as low as 25 per cent of pre-pandemic levels during the circuit breaker in April and May 2020.
While numbers have since bounced back after pandemic restrictions were largely eased, they are still below pre-Covid-19 levels.
The PTC said it will also propose ways to better balance between keeping fares affordable and ensuring the financial sustainability of the public transport system.

This issue came up in Parliament earlier this year during the debate on MOT's budget, when Transport Minister S. Iswaran and Workers' Party MP Jamus Lim engaged in a lengthy exchange over whether public transport could be made free for all seniors and people with disabilities.
Mr Iswaran pointed out that the Government currently spends more than $2 billion annually in subsidies for public transport commuters - about $1 billion for bus operations and $1 billion for train ones.
He also noted that shifting work and travel patterns, an ageing population and volatile energy prices will impact public transport over the next decade.
In December last year, bus and train fares were raised by 2.2 per cent - or three to four cents for adults and one cent for seniors, students, people with disabilities and low-wage workers.
This was because of a 4.4 per cent fare hike that was carried over from 2020.
The maximum allowable fare adjustment last year was actually -2.2 per cent based on the current formula.
The fare increase could have been much higher - 51.5 per cent - had the PTC not excluded the NCF in the fare formula for 11 out of the 12 months in 2020 to account for the exceptionally sharp drop in ridership due to Covid-19.
The PTC has said that it will continue to exclude this drop in ridership when calculating the NCF for this year's fare review.

 

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S'pore core inflation hits 13-year high of 4.8% in July, overall inflation reaches 7%​

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Claire Huang
Business Correspondent

August 23, 2022

SINGAPORE - Consumer prices in Singapore extended their searing climb last month with core inflation hitting 4.8 per cent year on year, up from 4.4 per cent in June.
This was the highest in more than 13 years, with the inflation measure hitting 5.5 per cent in November 2008.
Core inflation - which excludes costs of private transport and accommodation - surged because of stronger increases in the prices of food, as well as electricity and gas.
The July figure is higher than the Bloomberg consensus of a 4.7 per cent increase.
The headline consumer price index (CPI) or overall inflation for July came in at 7 per cent - the highest in 14 years since it hit 7.5 per cent in June 2008.
The rise was led by increases in private transport and accommodation. July's CPI is level with Bloomberg's estimates but higher than the 6.7 per cent in June.
Data from the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) released on Tuesday (Aug 23) showed that food inflation came in at 6.1 per cent in July from 5.4 per cent in June - a result of higher prices for food services and non-cooked food.

Electricity and gas prices edged up to 24 per cent in July on the back of a larger increase in electricity and gas tariffs.
Accommodation inflation came in at 4.6 per cent due to a faster pace of increase in housing rents, while private transport costs rose to 22.2 per cent led by a stronger pickup in car prices.
Services inflation crept up slightly to 3.5 per cent as the costs of outpatient services, airfares and recreational and cultural services recorded larger increases.
For retail and other goods, inflation came in at 2.8 per cent, lower than 3.1 per cent in June. This was due to a slower pace of increase as telecommunication equipment and medicine and health product inflation declined. At the same time, the cost of personal effects fell.
Both MAS and MTI said inflationary pressures will remain elevated in the months ahead.
For the full year, the headline inflation forecast was maintained at between 5 per cent and 6 per cent, while core inflation is projected to average between 3 per cent and 4 per cent.

 

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Some seniors bear brunt of inflation as children give them less money​

As the rate of core inflation goes up, seniors in Singapore aged 65 and above are bearing the brunt of inflationary pressures. PHOTO: ST FILE

Shermaine Ang

Aug 29, 2022

SINGAPORE - Divorcee Chua Lye Tszio, 78, who lives alone in a rental flat in Tampines and does not have a retirement fund, gets by on $600 a month from her four daughters.
But the amount is getting increasingly hard to stretch, with core inflation rate hitting a 13-year high of 4.8 per cent, and overall inflation reaching 7 per cent in July.
As the rate of core inflation goes up, seniors in Singapore aged 65 and above are bearing the brunt of inflationary pressures.
They have been receiving a smaller amount of cash allowance from their loved ones, according to a study by the Central Provident Fund (CPF) Board. At the same time, higher consumer prices have raised their expenses to 96 per cent of their income, higher than the average of 64 per cent, a DBS study showed.
The latest Retirement and Health Study by the CPF Board showed that the share of seniors who received cash allowance from their children dropped from 69 per cent in the two-year period from 2018 to 2019 to 64 per cent in the 2020 to 2021 period. Those who have a monthly allowance got 4 per cent less in 2020, from $500 to $480.
The board said this could be a reflection of the economic impact of the Covid-19 pandemic, when their children cut back on their cash allowances.
In the survey, 12,000 to 15,000 individuals were interviewed every two years since 2014 on their retirement and health needs.

Meanwhile, the DBS study found that those aged 58 to 76 have an expense-to-income ratio of 96 per cent, compared with 64 per cent for the average DBS customer.
"This suggests lower bandwidth among (baby) boomers, including seniors, to tackle inflationary pressures going forward," senior economist Irvin Seah from DBS Group Research told The Straits Times.
"Though inflation will remain elevated this year, there are signs that it is near its peak, judging from the moderation in global prices for food, energy and commodities in the past three months," he added.

Mr Seah said that from May 2021 to May this year, baby boomers' spending on shopping increased the most, with a 47 per cent spike, followed by transport spending, which rose 44 per cent, and food spending, which rose 26 per cent.
The three largest components of spending are typically food, transport, and housing and utilities, he said.
He suggested that baby boomers can consider cutting discretionary spending, such as shopping.

But some seniors like Madam Chua do not have this option - she is already spending only on necessities.
While she thinks $600 a month is hard to live on, it is enough for her as she lives simply, she said.
"(The amount) is just nice... As long as there's enough to eat, I don't ask for more."
She usually cooks simple meals of rice with egg, sardines or luncheon meat, and spends her days in the Lions Befrienders Seniors Activity Centre in her housing block.
She visits the doctor once or twice a month for her asthma and knee pain, and her daughters foot the bill.
She told ST she does not want to ask any of her daughters for more allowance as they have children to support and are trying to make ends meet themselves.
While she is concerned about inflation and the rising cost of living, she does not see the point of fretting over them. "It's no use to worry," she said.
Economics lecturer Eric Yeo, 34, gives his parents $600 a month.
As he gives them a fixed percentage of his income, the amount has increased over the years, but Mr Yeo is not raising the amount this year as he has to support his children, aged five and one.
"My parents are not too worried (about inflation); they're not big spenders," he said, adding that he has two siblings helping to support his parents.
He is cutting back on his expenses as well, taking his children to free playgrounds rather than paid ones and having less artisanal ice cream, for instance.
"But not to the point of feeling deprived," he added. "I'm not that concerned about inflation as I think it is short term."

Mr Joe Tan, who heads integrated case management at Care Corner Seniors Services, said some of his clients' children saw their finances impacted by the pandemic, on top of having to cope with inflation and the increased cost of their parents' healthcare needs. Middle-income workers may not qualify for financial support, which may add to their family's financial burdens, he added.
He said children may cut back on their parents' cash allowance when their incomes do not increase in tandem with price hikes. Trouble arises when seniors compensate for this by eating less or lower-quality food or skipping medical appointments, he said.
Some seniors delay asking their children for financial help for fear of burdening them, or straining their relationship further, he added.
Lions Befrienders chairman Anthony Tay said the Government has made employment available for seniors who want to return to the workforce, where job redesign, job matching and skills upgrading are offered at a very low cost.
He said micro jobs with flexible hours may also benefit seniors.
The Ministry of Social and Family Development (MSF) said there are sources of retirement support for elderly Singaporeans, such as the Pioneer and Merdeka Generation packages and the Silver Support Scheme. The payout amounts have been increased for the scheme since January last year to strengthen support for seniors with lesser means.
Those who need help can call the ComCare hotline on 1800-222-0000 or approach the nearest Social Service Office, MSF added.

 

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S'pore core inflation near 14-year high of 5.1% in August on more costly food, services​

Food inflation came in at 6.4 per cent in August, up from 6.1 per cent the previous month. PHOTO: ST FILE

Claire Huang
Business Correspondent

Sep 23, 2022

SINGAPORE - Consumer prices in Singapore stubbornly continued their climb in August to a near 14-year high as food items and services became more costly.
Geopolitical tensions, rising global commodity prices, supply chain disruptions and food nationalism, apart from unpredictable weather, are expected to add to uncertainties.
Singapore had moved ahead of the curve in tackling inflation, but the August data suggests challenging times ahead.
Core inflation, which excludes costs of private transport and accommodation and reflects the expenses of Singaporean households more accurately, hit 5.1 per cent year on year. This is higher than the 4.8 per cent rate in July and marks its highest level since it touched 5.5 per cent in November 2008.
August’s headline consumer price index (CPI) or overall inflation came in at 7.5 per cent, matching the 14-year high in June 2008. In July, it had touched 7 per cent.
The jump mainly reflected higher transport inflation, bigger holiday expenses, steeper hikes in housing rentals and more costly food and services.
CIMB economist Song Seng Wun was keeping an eye on food and accommodation costs.

“The impact of higher input costs from earlier months is working its way to consumers,” he said. Food prices were up 6.4 per cent in August from a year ago. Mr Song pointed out that a small portion of the public still rent and said the rental hike was “crazy”.
Condo rents surged by 27.5 per cent year on year in August, while HDB rents were 21.6 per cent higher.
For the full year, the headline inflation forecast remains unchanged at between 5 per cent and 6 per cent, while core inflation is projected to average between 3 per cent and 4 per cent, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Friday.

Striking a more cautious tone, they said “core inflation is projected to stay elevated over the next few months”.
For the first eight months of the year, headline inflation stands at 5.7 per cent year on year, which is near the upper end of the MAS forecast.
OCBC’s chief economist Selena Ling and Mr Song believe headline inflation will remain within MAS projections, that it will peak later and remain elevated for longer.
“I still think by December it will lower just because the base for comparison will be a little bit kinder,” said Mr Song, who noted that headline inflation in December 2021 hit 4 per cent.
But Oxford Economics’ senior economist Alex Holmes thinks that a breach of the full-year forecast “now looks likely”.

For headline inflation to stay within projections would require more moderate month-on-month increases for the rest of the year.
“But that’s not looking likely given the core price-pressures emanating from a very tight labour market and another likely hike in utility tariffs at the start of Q4, due to sky-high global gas prices,” Mr Holmes noted.
Ms Ling expects 2022 core inflation to come in above 4.2 per cent, higher than MAS estimates.
She noted that the Russia-Ukraine war escalation and the rice export ban by India could raise risks of higher prices, on top of domestic wage pressures.
Economists now expect MAS to tighten its monetary policy at the mid-October meeting given the strong inflationary pressures.
The risk of further action such as the re-centring of the monetary band is now also “very high”.
MAS has been tightening monetary policy to fight inflation. The move means a stronger Singdollar that would make imports cheaper and exports more costly, but MAS had warned that it also risks slowing the economy.

 

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Some major pre-school players to raise fees in 2023​

MindChamps, which has about 40 outlets, will raise fees by 7 per cent from $2,055 to $2,195 before GST. PHOTO: LIANHE ZAOBAO

Shermaine Ang


OCT 3, 2022

SINGAPORE - Parents of pre-schoolers will have to pay higher fees in 2023, with major chains set to raise monthly charges by up to 11 per cent.
Kiddiwinkie Schoolhouse, which has eight centres, will bill at least $1,600 before GST (up by $80) for its half-day programme and $1,800 (up by $100) for a full day from Jan 1.
In a circular to parents on Sept 1, it cited inflation and higher operational costs for the increase.
At Cherie Hearts, which has seven centres, fees will go up by 11 per cent, from $1,316 to $1,461 (including GST).
Charis Montessori, which has four outlets, will charge 10 per cent more, from $1,500 to $1,650, for its full-day programme, while MindChamps, which has about 40 outlets, will raise fees by 7 per cent from $2,055 to $2,195 before GST.
But pre-schools that receive subsidies from the Government to boost access to early education, especially for children from lower-income or disadvantaged backgrounds, have to keep fees affordable.
Anchor operator pre-schools appointed by the Early Childhood Development Agency (ECDA) currently have a fee cap of $720 before GST. These include PCF Sparkletots Preschool, My First Skool, M.Y World Preschool, Skool4Kidz and E-Bridge Pre-School.

ECDA-appointed partner operators such as Star Learners Child Care and Little Skool House have a fee cap of $760 before GST.
The agency said fee caps for anchor operator pre-schools have not changed since 2014, while those for partner operator pre-schools were lowered in 2021.
This has brought down median fees in the pre-school sector from $800 for full-day childcare in 2016 to $760 in 2021 before subsidies, it added.

The Straits Times understands that PCF Sparkletots, the largest pre-school provider with more than 360 centres that are attended by more than 40,000 children, is in discussions with ECDA over the fee issue. Its full-day programme costs $770.40 (including GST) before subsidies.
Star Learners, which currently charges $760 for its full-day programme, said it does not plan to increase its fees.
M.Y World, which currently charges $720, told ST that it is committed to "ensuring our curriculum continues to evolve with the interests of children today", but did not say whether it will be raising its fees.
There is good news for parents whose children attend MOE Kindergartens, whose fees will remain at $160 across its 43 centres for the K1 and K2 half-day programmes.

Its fees were last increased in 2018, by $10, said the Ministry of Education. The MOE Kindergarten programme was started in 2014 to provide affordable pre-school education to Singaporeans.
The fee hikes come on top of the current higher costs of many other goods and services because of inflation.
Mr Mark Lee, who has two children aged three and five in My First Skool and a one-year-old on the waiting list, is concerned about the potential hike in pre-school fees.
"It will be costly amid rising food, petrol and utility prices, and I will definitely feel the pinch," he said.
"The Government should consider subsidising or absorbing the increase for government-aided pre-schools. Private pre-schools can bear the bulk of the increases since they already charge a premium for their curriculum."
Noting that switching to a cheaper pre-school is not a simple matter, Mr Lee, who is in his 30s and works in business development, added: "Convenience is key too. If the cheaper option is a lot farther, then that is another (factor)."
More than 60 per cent of pre-school children are enrolled in government-supported pre-schools, according to ECDA.
ECDA provides basic and additional means-tested subsidies, with working mothers receiving $300, while others get $150.
In 2020, ECDA raised the gross monthly household income ceiling for means-tested subsidies from $7,500 to $12,000, and increased subsidy amounts.
Around 92,000 families now receive means-tested pre-school subsidies, up from about 48,000 children in 2019, said ECDA.

 

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Train, bus fares to rise by 4 to 5 cents for adults from Dec 26​

The 2.9% fare adjustment is lower than the maximum 13.5% increase allowed under the current fare formula. ST PHOTO: LIM YAOHUI

Kok Yufeng
Transport Correspondent

Oct 13, 2022

SINGAPORE - Public transport fares will rise for the second year running, going up by 2.9 per cent, with bus and train rides costing four to five cents more from Dec 26 for adults who pay by card.
Concessionary fares for seniors, students, people with disabilities and low-wage workers will go up by one cent per trip, said the Public Transport Council (PTC) Wednesday following its annual fare review exercise. There are about two million commuters in this group, or half of Singaporeans.
Cash fares and the fees for monthly passes will remain unchanged.
From Dec 26, adult commuters paying by card will spend four cents more for journeys of up to 8.2km, and five cents more for journeys longer than 8.2km.
About 54 per cent of public transport journeys taken by adults are below 8.2km.
With the latest hike, a trip between the Boon Lay and Clementi stations on the East-West Line, which is 8.2km in distance, will cost $1.45 for adult commuters using travel cards, up from $1.41 currently.
An 11.5km MRT trip from Harbourfront to Paya Lebar will cost $1.64, up from $1.59.

The PTC said the fare hike could have been much higher.
Citing a significant rise in costs from 2020 to 2021 fuelled by soaring fuel prices, the PTC said the current fare formula would have actually allowed for a maximum fare increase of 13.5 per cent.
A major contributor to this was the increase in energy costs, which rose by 117 per cent in 2021 due to the global energy crunch, the PTC said.


Transport operators SMRT Trains and SBS Transit had both applied for the full 13.5 per cent fare increase this year, citing energy costs, global inflation and challenges in hiring and retaining talent while maintaining high levels of service and reliability.
PTC said it was able to limit the fare increase to 2.9 per cent because the Government is forking out an additional $200 million in public transport subsidies in 2023, on top of the more than $2 billion in subsidies it already pumps in annually.
The remaining increase of 10.6 per cent will be rolled over to future fare reviews.

At a press conference, PTC chairman Janet Ang, who took over the role in May, said fares had to increase due to the spike in energy prices and other costs, such as salary increases for public transport workers.
Ms Ang, who is also a Nominated MP, said the council landed on the 2.9 per cent figure as it was close to the current inflation rate, and a little lower than expected wage increases.
Singapore's core inflation hit a 14-year high of 5.1 per cent in August.
The 2.9 per cent hike keeps public transport affordable for now, she added.
Ms Ang said PTC focused on ensuring there would be a minimal increase in fares for the needy and vulnerable. For instance, the cost of monthly passes for those travelling longer distances stayed the same.
Ms Ang said: "The PTC recognises commuters' concerns over increasing costs of living and the impact of rising inflation in Singapore... We are grateful that the Government has stepped in to support this decision."

PTC chairman Janet Ang said fares had to increase due to the spike in energy prices and other costs, such as salary increases for public transport workers. ST PHOTO: KEVIN LIM
The PTC said its indicators show that public transport here remains affordable, with households in the 21st to 40th percentile, which represent the average commuter, spending 1.8 per cent of their income on buses and train rides, compared with 2.3 per cent in 2012.
Lower-income households in the 11th to 20th percentile spend about 2.5 per cent of their income on public transport, down from 3.5 per cent 10 years ago.
The PTC said that even with the 2.9 per cent fare increase this year, the average monthly public transport expenditure for these households will likely remain the same as last year, given that wages have increased by a greater degree.
To further defray the costs, the Government will give out 600,000 public transport vouchers worth $30 each, as it did in 2021, when fares rose by 2.2 per cent, or three to four cents for adults.
SMRT and SBS Transit will contribute a total of $3.44 million towards this.
MORE ON THIS TOPIC
600,000 public transport vouchers to help lower-income households cope with fare rise
Public transport operating costs up, not matched by revenue growth: Iswaran
The maximum allowable fare increase of 13.5 per cent this year was calculated after the network capacity factor (NCF) was excluded from the fare formula, which also accounts for core inflation, wage increases and productivity.
Introduced in 2018, the NCF tracks how much bus and rail capacity has changed in relation to actual usage, but the PTC said it is not designed to track short-term fluctuations in demand and supply.
The inclusion of the NCF in the fare formula would have skewed the maximum allowable increase even more as public transport ridership in 2021 was still being impacted by Covid-19.
In 2021, 5.3 million daily trips were made by buses and trains. This is 68 per cent of the record high of 7.7 million posted in 2019 before the pandemic.
The PTC is currently in the midst of reviewing the fare formula to account for changes in commuting patterns, and to balance fare affordability and financial sustainability of the public transport sector.
It aims to complete the review process by the first half of 2023.

 

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Singaporeans face another year of paying more for goods and services​

Ovais Subhani
Senior Business Correspondent

MAS said headline inflation, which is relevant to consumers, is expected to be around 5.5 per cent to 6.5 per cent. ST PHOTO: KUA CHEE SIONG


OCT 14, 2022

SINGAPORE - Singaporeans will continue to pay more for goods and services in 2023 than they did before the Covid-19 pandemic.
The central bank in its first assessment of the outlook for inflation in 2023 said on Friday that headline inflation, which is relevant to consumers, is expected to be around 5.5 per cent to 6.5 per cent.
That assessment takes into account the 1 percentage point hike in goods and services tax in January.
Even after stripping the impact of GST, inflation in 2023 would come in at 4.5 per cent to 5.5 per cent, said the Monetary Authority of Singapore (MAS).
Those numbers are a big improvement from the 14-year high of 7.5 per cent recorded in August and the full-year 2022 average of 6 per cent forecast by the MAS.
However, they are significantly higher than the 1.6 per cent average in the decade before the pandemic.
To a large extent, inflation has been running faster than the historical average as global prices started to rise last year amid most of the economies worldwide emerging from Covid-19 lockdowns.


However, Russia's invasion of Ukraine in February this year and off-and-on lockdowns in China resulted in supply disruption, boosting inflation even more.
Analysts believe such disruptions and geopolitical tensions will continue to support prices at higher than usual levels.
Mr Irvin Seah, senior economist at DBS Bank, said: "Singapore has little influence over the high global inflation from a fundamentally changed economic and political international landscape."

As Singapore imports almost everything it consumes, import cost is the main driver of inflation here.
To mitigate global price shocks, MAS uses the Singapore dollar as the main policy tool to achieve price stability.
A stronger Singdollar results in lower import costs, but too much currency appreciation hurts export competitiveness.
"Exchange rate appreciation alone cannot be the panacea," Mr Seah said.

The MAS on Friday boosted its support for the Singdollar to fight inflation by tightening the Republic's monetary policy stance for the fifth time since October 2021.
However, the move was not as aggressive as widely expected, as it targeted only one of the three policy parameters used to move the Singdollar's trade-weighted value against a basket of currencies of Singapore's trading partners.
Mr Nicholas Mapa, senior economist at Dutch bank ING, said: "We expected a more aggressive move, but Singapore's central bank believes that today's move will build on past tightening of measures since October 2021 to reduce imported inflation and curb domestic cost pressures."
However, the Ministry of Trade and Industry's advance estimates for economic growth in the third quarter of 2022 released on Friday showed Singapore's gross domestic product (GDP) grew by a better-than-expected 4.4 per cent year on year, easing slightly from the 4.5 per cent growth in the previous quarter.
The economy expanded by 1.5 per cent from the previous quarter.
This was a turnaround from the 0.2 per cent contraction in the preceding quarter, and helped the economy avoid a technical recession, usually defined as two straight quarters of negative growth.

Mr Brian Tan, senior regional economist at Barclays Bank in Singapore, said the surprisingly robust third-quarter GDP growth likely further encouraged the MAS to stay the course on policy tightening.
While the export-driven manufacturing sector has been the mainstay of economic recovery after the pandemic-induced 2020 recession, the quarter rebound was aided by the service sector.
Mr Seah said a robust service sector expansion of 6.1 per cent on an annual basis and 2.5 per cent quarterly was the result of the easing of Covid-19 curbs and resumption of travel.
The expansion shows that domestic demand has defied rising prices and rising interest rates on borrowing for homes and cars. Hence, domestic cost pressures continue to feed into inflation in Singapore.
Analysts said recent data confirms that retail sales, possibly bolstered by foreign tourist arrivals, have held up well.

The MAS statement gave more evidence of robust domestic demand boosting inflation.
It said: "Inflation in discretionary goods and services was the major contributor, amid robust demand conditions, that supported the pass-through of higher imported and domestic costs."
In addition, domestic demand-driven private transport and accommodation inflation accelerated in the third quarter.
At the same time, a persistent shortage of workers is driving wages up, giving consumers the means to spend more.
MAS said the pace of domestic labour cost increase should ease over the course of 2023, as labour demand and supply rebalance, but the cost would likely remain above its historical average.
With inflation expected to remain elevated, the Government announced a new $1.5 billion support package for households, the bulk of which will benefit lower-income households and elderly retirees who feel the brunt of sustained inflation.

Mr Jamus Lim, associate professor of economics at ESSEC Business School Asia-Pacific, said that while he had expected some countervailing government support, increasing fiscal spending in the face of high inflation will require a balancing act.
"This is tricky because if fiscal policy is too expansionary, labour markets and aggregate demand are unlikely to ease sufficiently, which will sustain inflationary pressures," said Mr Lim, who is an MP from the opposition Workers' Party.
The latest support package, together with earlier measures announced at the Budget as well as in April and June 2022, will fully cover the increase in cost of living for lower-income households on average, said the Ministry of Finance.

 

[LITTLEREDDOT]

70% of Singaporeans concerned about higher household expenses: Study​

Consumers are now spending more, with the average ticket size of common daily expenses rising in January to July. ST PHOTO: KUA CHEE SIONG

Prisca Ang


OCT 19, 2022

SINGAPORE - Nearly 70 per cent of Singaporeans are concerned about higher household expenses, according to a recent study by UOB.
This is an increase of 11 percentage points from last year, owing to rising inflation and an uncertain economic climate.
About 70 per cent of Singaporeans also think there is a likelihood of the country entering a recession in the next six months, representing an increase of 7 percentage points from last year.
UOB interviewed close to 3,500 respondents across five markets in June for the third edition of its annual survey. These include more than 1,000 Singaporeans of varying age groups and levels of affluence.
Consumers’ main priorities are having sufficient savings, planning ahead for retirement, and being able to afford essential items for themselves and their families, the study showed.
Ms Jacquelyn Tan, UOB’s head of group personal financial services, said consumer spending has returned to pre-pandemic levels amid the reopening of economies globally. This comes after several years of higher savings as Covid-19 snuffed out travel.
“If you look at the fourth quarter, spending will continue to go up because of the festive and travel season that’s coming up, but I think it will normalise to a certain level because this is also a savings market that we have seen overall,” she told reporters on Wednesday.


Consumers are now spending more, with the average ticket size of common daily expenses rising in January to July, compared with the same period last year and taking into account inflation.
The average amount paid for a taxi ride surged 114 per cent. The increase was 22 per cent for utilities, 15 per cent for fuel and 10 per cent when it came to dining expenses.
But Singaporeans are also planning ahead — for example, by growing their money through investments and protecting themselves from unforeseen events through insurance.


UOB customers’ average placement in fixed deposits — interest rates have risen for these products across banks in recent months — soared by 370 per cent in July and August versus the first six months of 2022.
Purchases of government securities such as Singapore Savings Bonds and Treasury bills surged 462 per cent in the same time frame.
Meanwhile, the take-up of insurance policies grew 20 per cent so far this year, compared with the same period last year.

Ms Tan said: “Jobs and employment were also a top consideration (among respondents), besides finances. Covid has taught us that you need to plan for unforeseen circumstances.
“Your job might (be) displaced because of a certain industry that you’re in, or your income might (be) cut.”
It is important for consumers to save at least three to six months of their income, she said, adding that they also have to safeguard and protect themselves and their families before taking market opportunities.
But she noted that it is also important to invest as a person’s savings will otherwise be eroded by inflation.
Consumers are also concerned about their mortgage payments amid the rising interest rate environment, said Ms Tan.
She added: “If you own a property and you’re servicing a mortgage loan, make sure you consider how to service it for the next one year. You can also do some simulations of your monthly commitments at higher rates.”

 

[LITTLEREDDOT]

Singapore core inflation hits 5.3% in September, close to 14-year high​

Food inflation climbed to 6.9 per cent as the prices of both food services and non-cooked food rose at a faster pace. PHOTO: ST FILE

Prisca Ang

Oct 25, 2022

SINGAPORE — Consumer prices in Singapore continued to climb and reached a fresh 14-year high in September, on the back of higher costs of food, services and other goods.
Core inflation, which excludes costs of private transport and accommodation and reflects the expenses of Singaporean households more accurately, hit 5.3 per cent year on year. This is higher than the 5.1 per cent rate in August, and marks its highest level since it touched 5.5 per cent in November 2008.
September’s headline consumer price index (CPI) or overall inflation came in at 7.5 per cent, said the Monetary Authority of Singapore (MAS) and Ministry of Trade and Industry (MTI) on Tuesday. The percentage was unchanged from August and matched the 14-year high in June 2008.
Inflation has been on the rise amid uncertainties from geopolitical tensions, higher global commodity prices and supply chain disruptions.
MAS has tightened its monetary policy five times since October 2021 to support a stronger Singapore dollar and dampen imported inflation.

September’s figures were in line with estimates by analysts in a Bloomberg poll. They were buoyed by food inflation, which came in at 6.9 per cent year on year, compared with 6.4 per cent in August, as the prices of both food services and non-cooked food rose at a faster pace.
Services inflation also gained steam to hit 4 per cent in September, up from 3.8 per cent in August, due to larger increases in the cost of point-to-point transport services and holiday expenses. Meanwhile, there was a smaller decline in telecommunication services fees.


When it came to retail and other goods, inflation edged up from 2.9 per cent in August to 3.1 per cent in September. This was because of a faster pace of increase in the prices of telecommunication equipment, medicines, health products and other personal care products.
Electricity and gas inflation was unchanged at 23.9 per cent compared with August.
Accommodation costs rose by 4.9 per cent in September, up from August’s 4.7 per cent, due to a faster pace of increase in housing rents. However, private transport inflation moderated from 24.1 per cent in August to 22.3 per cent in September due to a slower pace of increase in car and petrol prices.

MAS and MTI said that globally, demand conditions in major economies have softened while supply chain frictions have continued to ease.
“Prices of energy and food commodities have come off their peaks from earlier in the year, but remain high given ongoing supply constraints. In addition, labour markets in major advanced economies are still tight, keeping wage pressures strong.
“Accordingly, across a range of goods and services, Singapore’s imported inflation is expected to remain significant for some time,” they said.


Labour costs at home are expected to rise further in the near term alongside robust wage growth, said MAS and MTI.
“At the same time, the cost of utilities is likely to remain elevated. Firms are expected to continue to pass through accumulated import, labour and other business costs to consumer prices amid resilient demand.
“Car and accommodation cost increases are also anticipated to stay firm in the quarters ahead amid tight COE (certificate of entitlement) quotas for cars and strong demand for rental housing respectively.”
Core inflation is expected to remain high in the next few quarters before slowing in the second half of next year as the tight domestic labour market eases and global inflation moderates, said MAS and MTI.
Core inflation was initially expected to have peaked around the middle of this year and stabilised in the second half of the year but that timeline has now been pushed into 2023.
Overall inflation is expected to average around 6 per cent for the full year, while core inflation is projected to come in around 4 per cent, according to MAS’ latest forecasts on Oct 14.
For 2023, overall inflation is forecast at between 5.5 per cent to 6.5 per cent, with core inflation at 3.5 per cent to 4.5 per cent. These estimates take into account the upcoming increase in the goods and services (GST) tax.
MAS and MTI said on Tuesday: “There are upside risks to the inflation outlook, including from fresh shocks to global commodity prices and more persistent-than-expected external inflation.”

 

[winners]

Tell this to those PuMaos in this forum, who are still bent on advocating that Russia should conquer/destroy Ukraine. I can sleep well tonight.

 

[birdie69]

Train, bus fares to rise by 4 to 5 cents for adults from Dec 26​

The 2.9% fare adjustment is lower than the maximum 13.5% increase allowed under the current fare formula. ST PHOTO: LIM YAOHUI

Kok Yufeng
Transport Correspondent

Oct 13, 2022

SINGAPORE - Public transport fares will rise for the second year running, going up by 2.9 per cent, with bus and train rides costing four to five cents more from Dec 26 for adults who pay by card.
Concessionary fares for seniors, students, people with disabilities and low-wage workers will go up by one cent per trip, said the Public Transport Council (PTC) Wednesday following its annual fare review exercise. There are about two million commuters in this group, or half of Singaporeans.
Cash fares and the fees for monthly passes will remain unchanged.
From Dec 26, adult commuters paying by card will spend four cents more for journeys of up to 8.2km, and five cents more for journeys longer than 8.2km.
About 54 per cent of public transport journeys taken by adults are below 8.2km.
With the latest hike, a trip between the Boon Lay and Clementi stations on the East-West Line, which is 8.2km in distance, will cost $1.45 for adult commuters using travel cards, up from $1.41 currently.
An 11.5km MRT trip from Harbourfront to Paya Lebar will cost $1.64, up from $1.59.

The PTC said the fare hike could have been much higher.
Citing a significant rise in costs from 2020 to 2021 fuelled by soaring fuel prices, the PTC said the current fare formula would have actually allowed for a maximum fare increase of 13.5 per cent.
A major contributor to this was the increase in energy costs, which rose by 117 per cent in 2021 due to the global energy crunch, the PTC said.


Transport operators SMRT Trains and SBS Transit had both applied for the full 13.5 per cent fare increase this year, citing energy costs, global inflation and challenges in hiring and retaining talent while maintaining high levels of service and reliability.
PTC said it was able to limit the fare increase to 2.9 per cent because the Government is forking out an additional $200 million in public transport subsidies in 2023, on top of the more than $2 billion in subsidies it already pumps in annually.
The remaining increase of 10.6 per cent will be rolled over to future fare reviews.

At a press conference, PTC chairman Janet Ang, who took over the role in May, said fares had to increase due to the spike in energy prices and other costs, such as salary increases for public transport workers.
Ms Ang, who is also a Nominated MP, said the council landed on the 2.9 per cent figure as it was close to the current inflation rate, and a little lower than expected wage increases.
Singapore's core inflation hit a 14-year high of 5.1 per cent in August.
The 2.9 per cent hike keeps public transport affordable for now, she added.
Ms Ang said PTC focused on ensuring there would be a minimal increase in fares for the needy and vulnerable. For instance, the cost of monthly passes for those travelling longer distances stayed the same.
Ms Ang said: "The PTC recognises commuters' concerns over increasing costs of living and the impact of rising inflation in Singapore... We are grateful that the Government has stepped in to support this decision."

PTC chairman Janet Ang said fares had to increase due to the spike in energy prices and other costs, such as salary increases for public transport workers. ST PHOTO: KEVIN LIM
The PTC said its indicators show that public transport here remains affordable, with households in the 21st to 40th percentile, which represent the average commuter, spending 1.8 per cent of their income on buses and train rides, compared with 2.3 per cent in 2012.
Lower-income households in the 11th to 20th percentile spend about 2.5 per cent of their income on public transport, down from 3.5 per cent 10 years ago.
The PTC said that even with the 2.9 per cent fare increase this year, the average monthly public transport expenditure for these households will likely remain the same as last year, given that wages have increased by a greater degree.
To further defray the costs, the Government will give out 600,000 public transport vouchers worth $30 each, as it did in 2021, when fares rose by 2.2 per cent, or three to four cents for adults.
SMRT and SBS Transit will contribute a total of $3.44 million towards this.
MORE ON THIS TOPIC
600,000 public transport vouchers to help lower-income households cope with fare rise
Public transport operating costs up, not matched by revenue growth: Iswaran
The maximum allowable fare increase of 13.5 per cent this year was calculated after the network capacity factor (NCF) was excluded from the fare formula, which also accounts for core inflation, wage increases and productivity.
Introduced in 2018, the NCF tracks how much bus and rail capacity has changed in relation to actual usage, but the PTC said it is not designed to track short-term fluctuations in demand and supply.
The inclusion of the NCF in the fare formula would have skewed the maximum allowable increase even more as public transport ridership in 2021 was still being impacted by Covid-19.
In 2021, 5.3 million daily trips were made by buses and trains. This is 68 per cent of the record high of 7.7 million posted in 2019 before the pandemic.
The PTC is currently in the midst of reviewing the fare formula to account for changes in commuting patterns, and to balance fare affordability and financial sustainability of the public transport sector.
It aims to complete the review process by the first half of 2023.

 

[LITTLEREDDOT]

Inflation in Singapore will stay high next year even as pace of economic growth slows: MAS​

While Singapore does not face an imminent threat of a recession, the outlook depends on the trajectory of advanced economies. ST PHOTO: KUA CHEE SIONG

Ovais Subhani
Senior Correspondent

Oct 27, 2022

SINGAPORE - Singapore is headed for a troubling year in which economic growth will slow while inflation will remain elevated, in part because wage increases are expected to continue.
Global prices may come off their recent peaks but inflation here will remain higher next year than the historical average, said the Monetary Authority of Singapore (MAS) on Thursday in its biannual Macroeconomic Review.
Meanwhile, the pace of economic growth will slow further in 2023 as pent-up demand at home from economic reopening and external demand for Singapore’s key electronics exports fade.
While the report shows that Singapore does not face an imminent threat of a recession, it warned that the outlook depends on the trajectory of advanced economies such as the United States and the European Union.
A deep and prolonged recession in these economies is still a possibility, with likely spillovers to externally oriented Asian economies such as Singapore.
For now, the MAS’ base-case scenario is that the US will avoid a full-year recession, in which case gross domestic product (GDP) growth in Singapore is likely to come in at 3 per cent to 4 per cent for 2022 as a whole, and moderate next year to a below-trend pace - estimated by analysts at around 3 per cent.
Meanwhile, weakening external demand has brought the global electronics cycle to the brink of a downturn. The electronics sector represents the bulk of Singapore’s export-driven manufacturing sector.


MAS said consumer demand for electronic devices in Singapore’s top two final-demand markets, China and the US, has contracted, adversely impacting Singapore’s electronics exports in recent months.
Apart from slower demand, the domestic semiconductor industry is also grappling with soaring energy costs, it said. Meanwhile, the momentum of recovery in the travel-related and consumer-facing sectors is set to ease as pent-up demand from economic reopening dissipates.
Consultancy firm Gartner has downgraded its 2022 forecast for global chip sales to 7.4 per cent from its previous forecast of 13.6 per cent.

In 2023, the industry is expected to enter a downturn, with revenue now projected to decline by 2.5 per cent, compared with positive growth previously.
The world’s top semiconductor foundry — Taiwan Semiconductor Manufacturing Company — expects demand for cutting-edge chips used in high-performance computing to remain firm, though the recent US export restrictions on advanced chips and chip equipment sales to China could hamper orders.
The World Trade Organisation also expects world merchandise trade volume growth to slow to just 1 per cent in 2023, from 3.5 per cent in 2022.
“Dampened global and regional trade flows will adversely affect activity in Singapore’s manufacturing, wholesale, water transport and storage sectors, even as global supply frictions continue to ease,” MAS said.

The latest electronics purchasing managers’ index for Singapore retreated further in September in a second consecutive month of contraction, as new orders and exports waned.
MAS said slowing external demand, arising from heightened global inflation and tighter financial conditions due to interest rate hikes by major central banks, has also dented growth prospects in the financial sector.
Meanwhile, growth in the insurance industry could also come under pressure.
“While growth in the economy should continue to be supported by expansions in the domestic-oriented and travel-related sectors, the pace of discretionary spending is likely to moderate as high inflation and the uncertain economic environment dampen consumer sentiment,” MAS said.
A slowing economy will take the vigour out of employment growth, but elevated inflation expectations should keep resident wage growth above pre-Covid-19 rates, which in turn will add to business costs.
“Resident wage growth is forecast to remain above its historical average next year, leading to an above-trend pace of increase in unit labour cost for services firms in particular, even as it slows compared with 2022.”
Also, local qualifying salary and progressive wage model expansions that came into effect last month, and the salary increases announced to retain workers in the civil service, healthcare and education sectors will likely provide a mild boost to resident wage growth for this year and next.
“Notwithstanding the weakening external outlook, hiring should remain firm in most sectors for the rest of 2022,” MAS said.

In the latest fourth-quarter hiring outlook surveys by the Singapore Commercial Credit Bureau and the ManpowerGroup, the net employment outlook remained firmly positive even as it moderated slightly from previous readings.
However, moderating global growth and tightening financial conditions will have some impact on labour demand, primarily in the external-oriented manufacturing sector and modern services, which include professional, financial and infocomm services.
The central bank maintained its recent inflation forecasts, saying core inflation, which excludes accommodation and private transport costs, is projected to average around 4 per cent this year, while the all-items headline inflation should come in at around 6 per cent.
For 2023 as a whole, taking into account all factors, including the goods and service tax (GST) hike due in January, core inflation is forecast to average 3.5 per cent to 4.5 per cent. Headline inflation next year is projected to average 5.5 per cent to 6.5 per cent.
Excluding the effects of the GST increase, core inflation may come in between 2.5 per cent and 3.5 per cent, while headline inflation may fall within 4.5 per cent to 5.5 per cent.
MAS’ assertion that inflation will remain above trend comes from the fact that core inflation in the decade before the pandemic started in 2020 averaged at 1.5 per cent.
The report follows the central bank’s decision on Oct 14 to reinforce the appreciation bias of the Singapore dollar, which helps damp import costs.
This was the fifth such move by MAS since October 2021. However, inflation remains stubbornly stuck at its highest level in 14 years.

 

[LITTLEREDDOT]

Most home owners to pay higher property taxes in 2023; Govt to give one-off rebate of up to $60​

Iras will be revising the annual value of HDB flats in line with the increase in market rentals. PHOTO: ST FILE

Shermaine Ang
UPDATED

DEC 3, 2022

SINGAPORE – Most home owners will have to pay higher property taxes in 2023 as the authorities raise the annual value of most residential properties to reflect the rise in rentals.
In addition to this, property tax rates are also set to increase from next year.
To offset the burden, the Government will provide a one-off tax rebate of up to $60 for all owner-occupied properties, said the Ministry of Finance and Inland Revenue Authority of Singapore (Iras) in a joint statement on Friday.
The annual value of most private residential properties and Housing Board flats will be raised from Jan 1, 2023, as part of Iras’ annual review of properties to calculate how much taxes should be paid, the authorities said.
The Government had also announced an increase in property tax rates in Budget 2022. This will take effect over two years from 2023, with steeper hikes for higher-end properties.
Those who own expensive private properties will feel the brunt of the revision, particularly owners of properties purchased for investment purposes.
For example, the 2023 progressive property tax on properties with an annual value of above $100,000 is 23 per cent if they are occupied by the owner. The progressive tax on similar properties is 27 per cent if they are not occupied by the owner.


In 2022, owner-occupiers were taxed up to 16 per cent, while those who rented out their flats were taxed up to 20 per cent.
Mr Wong Hong Wei, a credit research analyst at OCBC Bank, said that if a property which is not occupied by its owner has an annual value of $80,000 in 2022 that is increased to $100,000 in 2023, the property tax would increase from $10,200 to $19,650.
The property tax would rise further to $25,200 in 2024, he said.




All one-room and two-room flat owners will continue to pay no property tax, as the annual values of their homes remain below $8,000, said the authorities.
The majority of those living in other HDB flat types will pay between $30 and $70 more in property tax compared with 2022, after taking into account the rebate.
Owners living in three-room flats will each pay between $7.20 and $30.40 more after the rebate, while those living in four-room, five-room and executive flats will each pay between $33.60 and $67.20 more.

The one-off 60 per cent rebate, which is capped at $60, will be automatically offset against any property tax payable in 2023, said the authorities.
Iras monitors market rental trends to determine the annual value of properties. Since the last revision of annual values on Jan 1, 2022, rents of HDB flats and private homes have risen by more than 20 per cent, it said.
“Residential property annual values will be revised accordingly from Jan 1, 2023, to reflect this,” Iras said.
Rents rose in October for the 28th consecutive month for HDB flats and the 22nd consecutive month for condominium units.
HDB rents were 24.7 per cent higher in September compared with the same month last year.
A property’s annual value is its estimated annual rent if it were to be rented out, and is determined based on the market rents of comparable properties.
The property tax payable is derived by multiplying the property tax rate with the annual value of the property.

Owners living in their property, known as owner-occupiers, enjoy concessionary property tax rates ranging between 0 per cent and 23 per cent, while the property tax rates for those who rent out their flats range between 11 per cent and 27 per cent.
The tax rates are progressive, with higher-value properties and those that are rented out being taxed at higher rates, the authorities said.
For example, owner-occupiers of a four-room flat will pay between $107.20 and $155.20 in property tax next year, after an increase of $33.60 to $45.60 in annual tax payable from 2022. In comparison, the increase in annual tax payable from 2023 will be $55.20 to $67.20 for owner-occupiers of executive flats.
Property tax rates for residential properties not occupied by their owners, including investment properties, will be increased to 12 per cent to 36 per cent by 2024.
This compares with the current 10 per cent to 20 per cent tax levied on such properties.

Social support schemes that use annual property values to determine eligibility will not be affected by the 2023 revision in annual values. These include the GST Voucher scheme, MediShield Life premium subsidies and Workfare Income Supplement Scheme.
The annual value of HDB flats was last revised in 2022, and had previously remained unchanged since 2017.
Associate professor of economics Walter Theseira of the Singapore University of Social Sciences said: “Typically, annual value estimates from the tax authorities will lag (behind) actual increases in market and rental value, so the nature of these tax increases is that owners will enjoy some untaxed gains before the taxman catches up.”
For home owners with unoccupied properties, the increase in property taxes would encourage them to rent them out, Prof Theseira added.

Economist Song Seng Wun of CIMB Bank said there is strong demand for properties in land-scarce Singapore.
The property tax is a progressive wealth tax that is levied on those who can afford it and helps to diversify the sources of government tax revenue, he added.
OCBC’s Mr Wong noted that rising rents should mitigate the increase in property tax and mortgage repayment rates for private property owners.

 

[LITTLEREDDOT]

Singapore, New York top ‘world’s costliest city’ survey​

Singapore and New York have displaced the previous No. 1, Tel Aviv, in the Worldwide Cost of Living index. PHOTOS: ST FILE, REUTERS

DEC 4, 2022,

LONDON – Singapore and New York are jointly the world’s most expensive cities after inflation soared in 2022, an annual survey showed on Thursday.
The pair displaced the previous No. 1, Tel Aviv, which fell to third place in the Worldwide Cost of Living index from the London-based Economist Intelligence Unit (EIU), reported AFP.
The survey revealed “the soaring cost of living in the world’s biggest cities as the war in Ukraine and continuing pandemic restrictions disrupt supply chains, particularly for energy and food”.
New York hit the top spot for the first time. Los Angeles and San Francisco also moved into the top 10, while Damascus and Tripoli remained the cheapest cities.
Prices rocketed by an average of 8.1 per cent in the 172 major cities covered by the EIU survey, conducted between August and September.
Singapore’s Ministry of Trade and Industry (MTI) said the EIU report comes at a time when many countries around the world are facing strong inflationary pressures. But the survey, designed to help human resource managers gauge the cost-of-living allowances for expatriates and business travellers, “does not reflect the cost of living for Singaporeans”, a MTI spokesman said.
The EIU survey’s consumption basket, which includes items like Burberry-type raincoats and foreign daily newspapers, “does not reflect what Singaporeans usually consume”, the spokesman added.

The index also showed “the impact of the strong US dollar” on the city rankings, AFP reported. A total of 50,000 worldwide prices were converted into dollars to facilitate comparisons. The US currency has jumped in 2022 as the Federal Reserve hikes interest rates by large amounts to try to tame decades-high inflation.
Singapore’s MTI spokesman said due to the currency conversion, Singapore’s strong exchange rate contributed to its high ranking in the index.
“However, a stronger currency does not raise the cost of living of Singaporeans who earn their income in Singapore dollars. On the contrary, a stronger Singapore dollar helps to dampen imported inflation in Singapore by lowering the prices of our imports (in Singapore dollars) and subsequently, consumer prices,” the MTI spokesman added.


The biggest upward movers in the EIU survey were Moscow and St Petersburg, “which shot up by 88 and 70 places respectively as prices soared amid Western sanctions and buoyant energy markets supported the rouble”.
Ms Upasana Dutt, who headed the research, said “the war in Ukraine, Western sanctions on Russia and China’s zero-Covid-19 policies have caused supply chain problems that, combined with rising interest rates and exchange rate shifts, have resulted in a cost-of-living crisis across the world”.
“We can clearly see the impact in this year’s index, with the average price rise across the 172 cities in our survey being the strongest we have seen in the 20 years for which we have digital data,” she said.

---

World’s most expensive cities to live in​

1. Singapore/New York
3. Tel Aviv
4. Hong Kong/Los Angeles
6. Zurich
7. Geneva
8. San Francisco
9. Paris
10. Copenhagen

 

[LITTLEREDDOT]

Buying a new car? Expect to pay more with vehicle registration fee rising by 59% from $220 to $350​

The LTA said the hike was necessary to keep up with administrative costs. PHOTO: ST FILE

Christopher Tan
Senior Transport Correspondent

DEC 7, 2022

SINGAPORE - The cost of owning a vehicle is set to be even higher with the Land Transport Authority (LTA) raising vehicle-related fees from Dec 19.
In a letter sent on Dec 5 to motor traders, which was obtained by The Straits Times, the LTA said 25 fees and charges will rise from Dec 19.
They include fees for vehicle registration as well as those for certificate of entitlement (COE) transfers, vehicle-type approvals and vehicle recall notifications.
LTA said the hikes were necessary to keep up with administrative costs, adding that the last revision was in 2017.
Most fees will be increased by between 10 and 25 per cent, with the vehicle registration fee seeing the sharpest spike at 59 per cent.
This fee, which is payable each time a new vehicle is registered for use in Singapore, will go up from $220 to $350.
It was raised periodically over the years. The fee was $140 in 2000 and then increased to $220 in 2017 – a 57 per cent hike.

For motorcycles, the registration fee was $5 before 1998.
Given that 45,000 to 125,000 new vehicles are registered each year, the increase in the registration fee alone could add $5.9 million to $16.3 million to LTA’s revenue.
Motor traders were surprised by the LTA move, which comes as COE premiums remain at near record levels and core inflation stays high.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: “Everything is increasing – from vehicle inspection to chicken rice. This will only add to costs, which may be passed on to consumers.”
Mr Nicholas Wong, general manager of Honda agent Kah Motor, said: “I think in this period of high COE prices and poor market sentiment, it is bad timing for the increase.”
An ST report showed that car buyers have been shying away from showrooms amid sky-high COE prices, with scores of car sales staff leaving the industry as well.
Added Mr Wong: “The most impactful is the increase in registration fee from $220 to $350 – this is a 59 per cent jump! I think it’s not justifiable, and adds to the inflation rate. Dealers will have to absorb these costs.”
Mr Neo Tiam Ting, director of parallel importer Think One, said: “Under current costing, there would be no change. But moving forward, when dealers redo their costing, they will include this increase. Most dealers include it (the registration fee) in the packaged price.”
Mr Norman Lee, a director at motorcycle retailer Race Werks, said: “Isn’t it ironic that most LTA services are already digitised, online or self-service.
“Yet, over the years, such costs have had to rise, instead of falling because of cost savings and increased productivity?”

 

[congo9]

Who say digitalisation leads to cost saving to the people? Government n lta didn't say that.

 

[LITTLEREDDOT]

Cost-of-living crisis biggest global risk: Davos study​

Global inflation remains at sky-high levels, while supply constraints have also contributed to decades-high consumer prices. PHOTO: AFP

Jan 11, 2023

LONDON - The cost-of-living crisis will be the biggest global risk over the next two years, a survey by the World Economic Forum warned on Wednesday ahead of its Davos meeting next week.
Global inflation remains at sky-high levels after energy and food costs rocketed last year following the invasion of agricultural powerhouse Ukraine by major oil and gas producer Russia.
Supply constraints caused by the Covid-19 pandemic have also contributed to decades-high consumer prices.
“Conflict and geo-economic tensions have triggered a series of deeply interconnected global risks,” said the study ahead of the WEF’s annual meeting of global elites in the Swiss Alpine village of Davos.
“These include energy and food supply crunches, which are likely to persist for the next two years, and strong increases in the cost-of-living and debt servicing.”
It added that such “crises risk undermining efforts to tackle longer-term risks, notably those related to climate change, biodiversity and investment in human capital”.
The survey, produced with consultants Marsh McLennan and Zurich Insurance Group, took into account the views of more than 1,200 global risk experts, policymakers and industry leaders.

The report described the cost-of-living crisis as the “biggest short-term risk” by 2025, followed by natural disasters, extreme weather events and “geo-economic confrontation”.
“The short-term risk landscape is dominated by energy, food, debt and disasters,” said Saadia Zahidi, a managing director at the World Economic Forum (WEF).
“Those that are already the most vulnerable are suffering – and in the face of multiple crises, those who qualify as vulnerable are rapidly expanding, in rich and poor countries.”
The WEF study called “on leaders to act collectively and decisively, balancing short- and long-term views”.
And it concluded on the need for cooperation on strengthening “financial stability, technology governance, economic development and investment in research, science, education and health”.
Ms Carolina Klint, a risk management leader at Marsh, said this year will be marked by “increased risks” related to food, energy, raw materials and cyber security that will further disrupt global supply chains and impact investment decisions.
“At a time when countries and organisations should be stepping up resilience efforts, economic headwinds will constrain their ability to do so.”
Many analysts warn that the global economy will suffer a recession in 2023 as inflation remains elevated. AFP

 

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