The Minister for National Development is worried about investors rushing to buy "shoebox units". Link. The Monetary Authority of Singapore is worried that they are rushing to invest in perpetual bonds. Link.
I hope that our Government realize that the underlying problem is the extremely low interest rate in Singapore. Investors need to get a better return on their money. Retirees cannot afford to live on interest rate of 0.25% per year. If the retiree has $100,000, they only receive $250 A YEAR. Who can live on this type of income?
The low interest rate have forced investors to look at other types of investments, including paying high prices for "shoebox units" in the hope of getting a decent rental return. This high prices, which looked like a bubble, may not be sustainable.
If the Government is concerned about the financial future of the citizens, it is time for them to review their economic policy that caused interest rate to be so low. While low interest rate is a global phenomena in recent years, the low interest rate in Singapore has been around for a much longer period.
The Government should consider the issue of long term Government bonds that offer a yield to citizens that is higher than the rate of inflation. Some countries have issued bonds that give an interest rate that is higher than inflation. This option should be explored.
I hope that our Government realize that the underlying problem is the extremely low interest rate in Singapore. Investors need to get a better return on their money. Retirees cannot afford to live on interest rate of 0.25% per year. If the retiree has $100,000, they only receive $250 A YEAR. Who can live on this type of income?
The low interest rate have forced investors to look at other types of investments, including paying high prices for "shoebox units" in the hope of getting a decent rental return. This high prices, which looked like a bubble, may not be sustainable.
If the Government is concerned about the financial future of the citizens, it is time for them to review their economic policy that caused interest rate to be so low. While low interest rate is a global phenomena in recent years, the low interest rate in Singapore has been around for a much longer period.
The Government should consider the issue of long term Government bonds that offer a yield to citizens that is higher than the rate of inflation. Some countries have issued bonds that give an interest rate that is higher than inflation. This option should be explored.
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