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Singapore Family Sedan Matches Cost of a U.S. Home
By Wes Goodman - Jun 5, 2012 7:27 AM GMT+0800
Vinay Mathur gave up on buying a new car in Singapore as the cost of a permit rose to the highest in 17 years. He settled for a two-year-old BMW 3-series.
“By the time we began seriously to think of buying a car, license prices had shot up,” said Mathur, 42, referring to the so-called certificates of entitlement, which are auctioned by the city-state and used to control congestion.
Enlarge image Singapore Family Car Matches Cost of a U.S. Home
Customers look at cars in a Volkswagen AG showroom in Singapore. Record economic growth in the city state is enabling buyers to splash out on Bayerische Motoren Werke AG and Daimler AG autos even as a 24-fold jump in the cost of a car permit inflates costs. Photographer: Munshi Ahmed/Bloomberg
Enlarge image SDP Secretary General Chee Soon Juan
Chee Soon Juan, secretary general of the Singapore Democratic Party, said the government should amend the permit system because it favors the rich. Photographer: Munshi Ahmed/Bloomberg
At S$86,889 ($67,000) just for a permit, the total price of a Volkswagen Passat in Singapore is about the same as the median U.S. metropolitan home. A 25 percent jump in residents in seven years, coupled with the world’s highest proportion of millionaire households, has fueled a 10-fold surge in license prices over three years. The government said last week it will postpone plans to cut the number of permits available and slow traffic growth, responding to the outcry over soaring prices.
After the ruling People’s Action Party lost a by-election in the opposition-led Hougang district on May 26, Prime Minister Lee Hsien Loong reiterated a pledge to change the way the party governs a population that opinion surveys show is most concerned with issues such as high living costs and an influx of foreign residents. The PAP remained in power last year with the smallest general election victory since independence in 1965.
“The COE system is well-intended in that it does limit the traffic to some extent and pollution, but it bumps up the price of even entry-level cars to a ridiculous level,” said Mathur, a senior executive who moved to Singapore from Mumbai with his wife and young son two-and-a-half years ago. Mathur said he was entitled to an interest-free, five-year loan of S$130,000 from his company, and didn’t want to spend more than that.
Car or House?
A new 2012 Passat sedan made by Volkswagen AG (VOW), the world’s second-largest carmaker, costs about $152,000 in Singapore, including the license, according to classified ads website SGCarMart.com. The median price of a U.S. metropolitan area home is $158,100, National Association of Realtors data show.
So-called open-category permit, which can be used to buy any type of vehicle, reached S$92,010 in April, the highest since the end of 1994 when a record of S$110,500 was reached. At the latest auction May 23, the licenses went for S$86,889, compared with S$8,501 three years ago. The permits give the right to own a car for 10 years. The next auction is tomorrow.
Besides having to bid for certificates at auctions that are held every two weeks, Singaporeans also pay registration fees and taxes that can amount to 150 percent of the market value of a vehicle, according to the Land Transport Authority website.
Delayed Cuts
......................
By Wes Goodman - Jun 5, 2012 7:27 AM GMT+0800
Vinay Mathur gave up on buying a new car in Singapore as the cost of a permit rose to the highest in 17 years. He settled for a two-year-old BMW 3-series.
“By the time we began seriously to think of buying a car, license prices had shot up,” said Mathur, 42, referring to the so-called certificates of entitlement, which are auctioned by the city-state and used to control congestion.
Enlarge image Singapore Family Car Matches Cost of a U.S. Home
Customers look at cars in a Volkswagen AG showroom in Singapore. Record economic growth in the city state is enabling buyers to splash out on Bayerische Motoren Werke AG and Daimler AG autos even as a 24-fold jump in the cost of a car permit inflates costs. Photographer: Munshi Ahmed/Bloomberg
Enlarge image SDP Secretary General Chee Soon Juan
Chee Soon Juan, secretary general of the Singapore Democratic Party, said the government should amend the permit system because it favors the rich. Photographer: Munshi Ahmed/Bloomberg
At S$86,889 ($67,000) just for a permit, the total price of a Volkswagen Passat in Singapore is about the same as the median U.S. metropolitan home. A 25 percent jump in residents in seven years, coupled with the world’s highest proportion of millionaire households, has fueled a 10-fold surge in license prices over three years. The government said last week it will postpone plans to cut the number of permits available and slow traffic growth, responding to the outcry over soaring prices.
After the ruling People’s Action Party lost a by-election in the opposition-led Hougang district on May 26, Prime Minister Lee Hsien Loong reiterated a pledge to change the way the party governs a population that opinion surveys show is most concerned with issues such as high living costs and an influx of foreign residents. The PAP remained in power last year with the smallest general election victory since independence in 1965.
“The COE system is well-intended in that it does limit the traffic to some extent and pollution, but it bumps up the price of even entry-level cars to a ridiculous level,” said Mathur, a senior executive who moved to Singapore from Mumbai with his wife and young son two-and-a-half years ago. Mathur said he was entitled to an interest-free, five-year loan of S$130,000 from his company, and didn’t want to spend more than that.
Car or House?
A new 2012 Passat sedan made by Volkswagen AG (VOW), the world’s second-largest carmaker, costs about $152,000 in Singapore, including the license, according to classified ads website SGCarMart.com. The median price of a U.S. metropolitan area home is $158,100, National Association of Realtors data show.
So-called open-category permit, which can be used to buy any type of vehicle, reached S$92,010 in April, the highest since the end of 1994 when a record of S$110,500 was reached. At the latest auction May 23, the licenses went for S$86,889, compared with S$8,501 three years ago. The permits give the right to own a car for 10 years. The next auction is tomorrow.
Besides having to bid for certificates at auctions that are held every two weeks, Singaporeans also pay registration fees and taxes that can amount to 150 percent of the market value of a vehicle, according to the Land Transport Authority website.
Delayed Cuts
......................
http://www.bloomberg.com/news/2012-0...-u-s-home.html