Economic “Challanges” In Singapore Today

Most Singaporeans would say that there are 2 things which are incredibly expensive in Singapore – Houses and Cars. Prices of Houses and Cars, especially the latter, have been amongst the most expensive in the world, and certainly in Southeast Asia. For example, buying a nice house in Malaysia costs less than buying a HDB flat in Singapore, and the price we have to pay for a nice condominium or landed property would have allowed us to buy a nice mansion in Malaysia.

Likewise for cars. We are one of the most expensive, if not the most expensive, places in the world to buy a car. Many of my Singaporean friends used to lament that the price they paid for a low-cost Asian-made car could have allowed them to buy a Mercedes or BMW in Germany.

Lately, however, the economy in Singapore has been severely impacted by the Covid-19 pandemic and further aggravated by the war in Ukraine, which is starting to push costs upwards. Everything is starting to become a lot more expensive today compared to the last 1 to 2 years. This puts a lot of pressure on everyone, especially those who are no longer employed or employable. The Singapore Government is doing everything possible to ensure that staple food items remain affordable, but this has been a formidable task due to supply-chain issues and other difficulties caused by bad weather and natural disasters.

Of course, prices of houses and cars have also risen significantly in recent months, and maintained their incredibly-expensive status in Singapore. Petrol-prices have risen sharply due to the Ukraine war and the sanctions imposed on Russia for initiating it, and made car-ownership even more expensive in Singapore.

Despite all the rising costs and the economic uncertainties, sales of houses and cars continue to be brisk in Singapore which defies logical-thinking. The question is Why? Perhaps the sentiments offered by the buyers today address the question to some extent. Almost all the buyers felt that no one can predict what will happen in the future. Will prices go up, remain stable, or go down. There are risks in buying now, but there are risks in waiting as well. It all boils down to dollars and sense. If you can afford it and need it, just do it. I think there is a rationale in such a thought process. The most important advice that can be shared is, don’t spend now if you really cannot afford to do so. But if you can afford to do so, go for it.