Rising property prices, GST hike top concerns of young investors: Survey

by Albert02

Rising property prices, GST hike top concerns of young investors: Survey

Rising property prices, GST hike top concerns of young investors. According to a poll issued by Singapore-based digital wealth adviser Endowus, rising property prices and the proposed GST hike starting next year were among the top concerns of investors in their 20s.

According to the survey, which included 680 people of various ages, 58 percent of those aged 21 to 29 were anxious about the impending GST rate hike. Respondents in this age bracket were either finishing off their studies or just getting started in their employment, and their savings and investment portfolios were rising.

The GST rate in Singapore will grow from 7% to 8% on January 1 next year, then from 8% to 9% on January 1, 2024. The move was disclosed during the February Budget debate.

Singapore is dealing with rising inflation, which reached a 10-year high in March.

The Monetary Authority of Singapore (MAS) tightened monetary policy aggressively last month to contain the price rise.

Kimberely Misson, a 21-year-old self-employed survey participant, said that while the GST increase was something most Singaporeans had expected, the timing of its implementation caught some people off guard.

“People were probably expecting a GST increase sooner or later, but the speed with which it was executed caught them off guard. This is especially true given that we’ve just recovered from a pandemic and inflation is rising quicker than projected, so people will need time to adjust to all of this.”

According to the survey, 13% of those aged 21 to 29 are concerned about the impact rising house prices will have on their finances.

Another responder, Kelly Lai, a 28-year-old accountant who started working in 2018, said she was initially excited about the prospect of purchasing a Housing Board flat with her fiance. However, the first euphoria has subsided.

“I’m worried about rising housing costs since I’m intending to buy a house for the first time,” said Ms Lai, who is also planning her wedding next year.

She had planned to invite roughly 150 people to the party, but she is now considering cutting the number down to save money.

“Now I’ll have to change my lifestyle and rethink my finances in order to save for the increased property costs.”

The nervousness of the younger respondents in the study, according to Endowus CEO Gregory Van, was to be expected.

“This generation of respondents may still be in their early careers and have experienced the huge economic impact of the epidemic and, more recently, the Russian-Ukraine War in the last two years,” he said.

“A GST increase could be a more palpable problem for this group because it reduces their spending power by increasing the cost of products that they normally need and want.”

Despite the uncertainties, Ms Lai and Ms Misson will not be cutting back on their long-term investments such as investing in a condo like AMO Residence and may even increase their savings.

Other respondents agreed with this.

Despite the uncertain global economic future, 79 percent of all participants said they planned to increase their investments, for example a new development AMO Residence coming to Ang Mo Kio, while 19 percent said they would keep their present investment patterns. Only 2% said they would reduce the magnitude of their investment.

Mr Van suggested that one approach for younger Singaporeans to deal with their financial worries in the coming year is to increase their financial literacy, which will help them distinguish between investing and speculating.

“Rather than chasing markets, investing needs knowing how to plan for the future and make your money work towards your life goals. To keep one’s purchasing power and resist the uncertainties that result from macro shocks, one must invest wisely “he stated.

The Endowus poll was done between January and February 2022, with participants ranging in age and background, according to the business.

Endowus has over $1.5 billion in assets under advise as of the end of 2021, which is more than eight times what it had when it first began in 2019. Its client base has also increased by nearly 1,000% during the same time period.

Click the image to read the full details of report.
Source: https://www.straitstimes.com/business/economy/rising-property-prices-gst-hike-top-concerns-of-young-investors-survey

 

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