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This week, our regional wealth expert Ainsley Thomson looks at how Singapore broke into an influential ranking of pension systems. Real estate reporter Low De Wei discusses what’s driving supply and demand in the property scene, and Bureau Chief Andrea Tan puts the Har Gow to the test in a Muslim-friendly dim sum restaurant.
Age-Old Problems
Singapore’s journey from ”third world to first″ saw it emerge with triple-A credit ratings, bumper budget surpluses, a reputation for clean business and some of the best educational rankings in the world.
But — until now — the city’s pension system was seen as not quite best-in-class by at least one measure. And there are perennial discussions in an aging population about the lives of the elderly in such an eye-wateringly rich country.
The Singapore government earned a measure of vindication on Wednesday, when its pension system broke into the top tier of an influential global ranking for the first time.
Singapore is now the only Asian country to receive an A-grade in the Mercer CFA Institute Global Pension Index, joining a select group that includes the Netherlands, Iceland, Denmark and Israel.
It’s been a long time coming. When the index debuted 17 years ago, Singapore’s retirement system — built around the Central Provident Fund — was rated a lowly C. Since then, steady reforms have paid off. According to Tim Jenkins, the report’s lead author and a partner at Mercer in Sydney, Singapore has closely tracked the index over the years, making targeted changes to strengthen its performance. Most recently, those efforts have centered on boosting transparency and helping citizens better understand how much they can expect to receive in retirement.
But is achieving that ranking good enough for Singapore? The CPF is not without its critics. A 2023 EY report noted that younger Singaporeans with a higher risk appetite might earn better returns by investing on their own. Others, facing immediate financial needs, have been frustrated by how difficult it can be to access their savings.
And then there are the self-employed ‘aunties’ and ‘uncles’ working in the city’s ubiquitous hawker centers, cooking and cleaning in the tropical heat despite being well into their 60s or 70s. Many of those folks, and plenty of the others in the gig economy, have sometimes fallen outside of the scope of the CPF and don’t have enough to retire on. A new law is trying to plug the gap for gig workers, while the government has made efforts to pad the retirement accounts of older Singaporeans.
To be sure, there are plenty of countries grappling with problems ranging from underfunded pensions to longer waits for payouts and even young people opting out of payment plans. But Singapore’s top five ranking shows it’s making progress. The US (ranked 30th) and India (with a D grade) may want to take note.—Ainsley Thomson
Weekend Catch-Up
A selection of the best of Bloomberg storytelling, from podcasts and video to explainers and feature stories.
Another way of saving for old age is through buying property — the bet is that you’ll sock away funds that would have gone for rent, and hopefully should see capital appreciation over time.
The trouble is, real estate remains pricey in Singapore, despite government efforts to push speculators out of the market and keep housing for those who need it.
The latest eye-catching deal was a Warburg Pincus executive’s S$23.9 million ($18.5 million) purchase of a house in Jalan Pelangi sitting on around 835 square meters (8,989 square feet) of land. With more than 20 transactions for so-called Good Class Bungalows this year alone, it’s clearly very healthy at the high end.
The broader market did appear to take a bit of a breather in September, when developers sold just 255 units, barely a tenth of the level of a blowout August. But look below the surface, and buyer interest still seems pretty strong.
For a start, developers held back on major releases in September because of the overlap with the seventh month of the Chinese lunar calendar, which some see as an inauspicious time to buy homes. With the Ghost Month behind us, buyers are again queuing up.
Last weekend saw buyers snap up about 658 of 666 units on offer at the Skye at Holland in the best-selling residential launch this year. The properties sold at an average S$2,953 per square foot. That might seem expensive, but the development was actually marketed at a slight discount to similar units in the neighborhood of Holland Village, one of Singapore’s top expatriate enclaves.
As we wrote previously, developers, ever wary about new curbs and always wanting to appeal to Singapore’s budget-conscious buyers have adopted another curious tactic, shrinking unit sizes. At the Holland project, its two bedroom units were just 581 square feet, making them smaller than even some older one bedrooms, but they also work out to more palatable prices below S$2 million.
The frenzy, though, has taken even some seasoned observers by surprise. One analyst told me in an off-hand remark that they found the surge in interest in new homes hard to understand. There are signs the boom isn’t going away anytime soon. Already, the number of checks (which indicates interest) submitted for another mass project up for sale this weekend is more than four times the amount of units, which points to another blowout in sales.
What’s the outlook from here? Some caution that a softening jobs market and global economic uncertainty may mean the music can’t continue. On the other hand, Singapore’s central bank kept its monetary policy settings unchanged this week, and data showed the economy grew a healthy 2.9% in the third quarter from a year earlier, significantly faster then the 2% forecast in a Bloomberg News survey of economists. Analysts expect demand to remain robust, pointing to factors ranging from intergenerational wealth transfer to the growing numbers of wealthy foreigners who enjoy residency, along with the migration of relatively well-heeled Singaporeans from public to private housing. For authorities, that’s another tricky trajectory to mull. —Low De Wei
The Review: Loong Dim Sum
From the best spots for a business lunch to drinks with the boss, we sample the city’s eateries, bars and new experiences.
Loong, or dragon, is a quintessential name for a Chinese restaurant. Loong Dim Sum is round the corner from Boat Quay, serving bite-sized morsels in bamboo baskets. The food is halal, but you won’t miss the traditional meat usually found in dim sum.
Loong Dim Sum in Singapore.
Photographer: Andrea Tan/Bloomberg
The vibe. For a Monday evening, the place was buzzy with folks craving dim sum. Loong is spread over four floors with its main dining area located on the first two floors. It’s decorated with classic Chinese art, including a phoenix soaring above the mountains and calligraphy depicting the word Fu, or fortune. The interior is a visual reminder of its cuisine.
Can you conduct a meeting here? There’s enough space between the tables so you don’t have to worry about unwittingly oversharing details with your neighbor. The central location is a plus. The private dining room sits up to 10 people. Loong would be good for start-ups who are keen to show investors a cost-conscious mindset. It’s also ideal for including Muslim colleagues and getting quality Chinese food.
What about a romantic dinner? An after-work, casual date followed by a stroll along the Singapore River could work. But it’s not the spot if you’re looking to engage in long, meaningful conversations about your shared future. Dining time is kept to 90 minutes.
What we’d order again. The Har Gow, aka steamed crystal dumplings with tiger prawns (three pieces for S$7.80) were among the best we’ve had. They’re plump and tasty and served piping hot (of course).The Signature Juicy Bao (S$9.90) is a giant soup dumpling good for two or three people (or just one if you are a massive Xiaolongbao fan). We also ordered the Chili Crab Yam Dumpling, Loong’s take on the traditional “Wu Gok” (3 pieces, S$9.90), with a crispy, light exterior and slightly sweet and creamy filling. And we couldn’t stop eating Loong’s Spicy Fried Rice (S$13.90), its savory flavor enhanced by special sambal — there’s an option to pay an extra S$2 for petai (that’s a bitter bean popular with Southeast Asians around here, and a bit of an acquired taste — if you’re not a fan already, maybe leave it out.)
Signature Juicy Bao and Har Gow at Loong Dim Sum in Singapore.
Photographer: Andrea Tan/Bloomberg
Need to know. Loong Dim Sum occupies 10 North Canal Road. Open daily 11 a.m. to 11 p.m. Dinner cost us about S$200 for a group of five including mocktails. Reservations are strongly encouraged. —Andrea Tan
Have a place you’d like us to review or feedback to share? Get in touch at sgedition@bloomberg.net.
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