anyone read this before? 
Singaporeans earnings $4,500 or more per month belong to an interesting
group. I will label this group ³Four-Fivers². And the reasons they are interesting are as follows.
1. You can track them very easily through Singapore¹s published statistics.
They are the highest disclosed category. Everyone else is classified in bands eg. $4000-4999, $3500-3999, $3000-3499 etc. But from $4,500 onwards, there is no more segmentation _ it¹s just ³$4,500 or more²! It is also possible that the Department of Statistics finds the$4,500 threshold statistically interesting _ see Point 3.
2. ³Four-Fivers² are the fastest growing segment of the Singaporean
workforce. From 1992-2009, the number of CPF contributors increased by 53%. But the number of ³Four-Fivers² increased by 554%. They have gone from being just 5% of CPF contributors in 1992 to 14.1% in 2000 and 21.6% in 2009.
3. $4,500 per month is $54,000 per year (excluding bonuses!) or almost
US$40,000. This is a wage level worthy of a world class, developed country. To put into perspective, the nominal GDP per capita of the US, Japan and Germany is about US$40-45,000.
4. Many of the rapidly growing job categories in Singapore start in this
range of salary lawyers, private bankers, investment bankers, bond dealer, forex dealer, fund manager, management consultants, croupier supervisors, etc.
5. A couple made up of two ³Four-Fivers² do not qualify for public housing
i.e. the Housing Development Board flats.
6. A married couple comprising two ³Four-Fivers², under current interest
rate regimes, can afford a mortgage of nearly $1 million or more. Depending on their savings quantum, depth of parental support and whether they are upgrading from a HDB flat, it is quite possible for this couple to afford a family sized apartment costing $1,000 per square foot or more.
(Take note of Point 5 & 6. We will revisit them in a page or two. )
The following chart shows the number for ³Four-Fivers² among working
Singaporeans since 1995.
The numbers have risen an average of 17,700 per year since 1992. Only during recession/downturn years like 2009, 2001-2003 and 1998-99 does the number rise by less. Nevertheless, there has never been a year that the number fails to rise. Even in 2009, the number increased by 7,200.
If the long-run average rate of increase is sustained, by 2012, there will
be well over 400,000 Singaporeans in the ³Four-Fivers² category, accounting for nearly a quarter of all working Singaporeans.
It is now obvious that despite the relentless rise in housing prices, the
number of Singaporeans who can afford private housing at $1,000 per square foot or more is higher than it has ever been.
There was a slight dip in 2009 in the ratio due to the below-average
increase in ³Four-Fivers² that year but nevertheless, the levels are still near historical highs. I don¹t know what the projection for completion of residential units is over the next few years but the Yearbook of Statistics reveal that in 2009, there were roughly 38,000 private dwelling units
under construction. Assuming these units become available over the next 1-2
years, and if the ³Four-Fivers² maintain their trend rate of increase, the ratio will still be hovering close to the 140% mark by 2012.
With such ratios, the pressure on private property prices is likely to be
inexorably upwards.
Within a couple of years, one out of four Singaporeans will be a
³Four-Fiver² - developed country wage rate. He will own (or at least be able to afford) a dwelling unit that costs $1,000 per square foot or more _ a world class pricing, indeed. Like it or not, world class city means world class wages and world class prices.
Seen in this light, it is even more imperative that the government delivers
on its promise to move median wages from $2,400 to $3,100. Or the rich-poor gap and ³growing underclass² problems will become much greater.
Singaporeans earnings $4,500 or more per month belong to an interesting
group. I will label this group ³Four-Fivers². And the reasons they are interesting are as follows.
1. You can track them very easily through Singapore¹s published statistics.
They are the highest disclosed category. Everyone else is classified in bands eg. $4000-4999, $3500-3999, $3000-3499 etc. But from $4,500 onwards, there is no more segmentation _ it¹s just ³$4,500 or more²! It is also possible that the Department of Statistics finds the$4,500 threshold statistically interesting _ see Point 3.
2. ³Four-Fivers² are the fastest growing segment of the Singaporean
workforce. From 1992-2009, the number of CPF contributors increased by 53%. But the number of ³Four-Fivers² increased by 554%. They have gone from being just 5% of CPF contributors in 1992 to 14.1% in 2000 and 21.6% in 2009.
3. $4,500 per month is $54,000 per year (excluding bonuses!) or almost
US$40,000. This is a wage level worthy of a world class, developed country. To put into perspective, the nominal GDP per capita of the US, Japan and Germany is about US$40-45,000.
4. Many of the rapidly growing job categories in Singapore start in this
range of salary lawyers, private bankers, investment bankers, bond dealer, forex dealer, fund manager, management consultants, croupier supervisors, etc.
5. A couple made up of two ³Four-Fivers² do not qualify for public housing
i.e. the Housing Development Board flats.
6. A married couple comprising two ³Four-Fivers², under current interest
rate regimes, can afford a mortgage of nearly $1 million or more. Depending on their savings quantum, depth of parental support and whether they are upgrading from a HDB flat, it is quite possible for this couple to afford a family sized apartment costing $1,000 per square foot or more.
(Take note of Point 5 & 6. We will revisit them in a page or two. )
The following chart shows the number for ³Four-Fivers² among working
Singaporeans since 1995.
The numbers have risen an average of 17,700 per year since 1992. Only during recession/downturn years like 2009, 2001-2003 and 1998-99 does the number rise by less. Nevertheless, there has never been a year that the number fails to rise. Even in 2009, the number increased by 7,200.
If the long-run average rate of increase is sustained, by 2012, there will
be well over 400,000 Singaporeans in the ³Four-Fivers² category, accounting for nearly a quarter of all working Singaporeans.
It is now obvious that despite the relentless rise in housing prices, the
number of Singaporeans who can afford private housing at $1,000 per square foot or more is higher than it has ever been.
There was a slight dip in 2009 in the ratio due to the below-average
increase in ³Four-Fivers² that year but nevertheless, the levels are still near historical highs. I don¹t know what the projection for completion of residential units is over the next few years but the Yearbook of Statistics reveal that in 2009, there were roughly 38,000 private dwelling units
under construction. Assuming these units become available over the next 1-2
years, and if the ³Four-Fivers² maintain their trend rate of increase, the ratio will still be hovering close to the 140% mark by 2012.
With such ratios, the pressure on private property prices is likely to be
inexorably upwards.
Within a couple of years, one out of four Singaporeans will be a
³Four-Fiver² - developed country wage rate. He will own (or at least be able to afford) a dwelling unit that costs $1,000 per square foot or more _ a world class pricing, indeed. Like it or not, world class city means world class wages and world class prices.
Seen in this light, it is even more imperative that the government delivers
on its promise to move median wages from $2,400 to $3,100. Or the rich-poor gap and ³growing underclass² problems will become much greater.
