Rents, Wages Up But S’pore Cheaper Than HK, Tokyo

Source : The Straits Times, 28 Aug 2007

EVEN though property costs and wages are on the rise, Singapore remains cheaper than global cities in the region such as Hong Kong and Tokyo, said Trade and Industry Minister Lim Hng Kiang.

Nevertheless, the Republic cannot afford to be complacent, said Mr Lim. ‘We have to maintain vigilance over our costs, as excessive cost increases will dampen our growth prospects,’ he said.

Mr Lim was speaking in Parliament yesterday in response to MPs’ concerns about the impact of rising business costs on Singapore’s economic competitiveness.

In response to questions on this issue from Mr Liang Eng Hwa (Holland-Bukit Timah GRC), Mrs Josephine Teo (Bishan-Toa Payoh GRC), Dr Muhammad Faishal Ibrahim (Marine Parade GRC) and Madam Halimah Yacob (Jurong GRC), he laid out proactive steps that the Government has taken to address supply constraints.

Also, citing as examples London and New York, which are thriving hubs despite their high costs, Mr Lim said ‘competitiveness is more than offering low costs alone’, but also about value creation. In this respect, Singapore has attributes that economies in the region cannot easily replicate, such as its livability.

Also Mr Lim pointed out that in the past three years, the consumer price index has increased at an annual rate of 1 per cent, while overall unit labour cost actually declined at an annual average rate of 2.2 per cent. ‘However, in recent quarters, we have seen increases in property prices and rentals, as well as wages,’ he noted.

He cited recent moves to release land for temporary office space as well as provide more public flats for rental.

The Ministry of National Development (MND) also released additional information on property prices and rents ‘to allow the public and businesses to make more informed decisions on property purchases and rentals’.

And the MND has been putting out an ample supply of land with more than 42,000 private residential units and 640,000 sq m of office space to be completed by 2010.

The Government is also looking at ways to help more Singaporeans such as older workers and women take advantage of the strong employment market and rejoin the workforce.

Despite media reports of ’sky-high’ office rentals, Mr Lim said although the median prime office rent in the second quarter was $9.50 per sq ft per month, the median rent in other locations, accounting for about 80 per cent of office space here, was less than half of that.

Mr Lim also quoted studies which showed that Singapore remains cheaper than other global cities in the region.

A survey on global office market rentals by consultants CB Richard Ellis showed that Singapore was 30 per cent cheaper than Hong Kong, and 50 to 60 per cent cheaper than Tokyo.