Singapore Property: The higher end goes up first - Part 1. Sep 5, 2000

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SUMMARY: These maps should be read in conjunction with the earlier map "Singapore Property: Do very well or very badly" In time, the widening income gap would reflect itself as a widening gap between the top end of the residential property market and the rest. Inflation at the highest end of the property market is expected to be most pronounced as the number of millionaires are minted far more quickly than supply of top tier houses. A widening income gap is a temporary situation. It is largely created by insufficient supply of skills and talent at a time when leadership is sorely needed as we figure our way towards the new economy. The market is basically sending the price signals to attract more supply. When we are almost at the full cycle, the widened income gap will compress upwards with property values also following suit. The quickest way to progress is to allow the income gap to become as wide as possible to the point social harmony is not threatened. As the gap widens, the wise policy is to encourage followers to catch up rather than devolve into envy. It is an extremely difficult task, but if there is any government that could pull this off, it is this government.	How to Read Maps Maps Investment Maps Business Maps Experts Maps Other Maps Local Interest Partners
(Fig 1) The Knowledge Economy requires a whole new set of skills. The old skills are still often necessary, but they need to be complemented with new capabilities. What have become redundant are old practices, processes, products and services. There are relatively few people that are already trained and ready of the "New Economy".
(Fig 2) Since we operate a quasi-market system; as the market bid up the price of talent which is in short supply versus the relative abundance of workers with old skills, the income gap widens. In times of significant shifts or transformation of the economy, most managers are called to be change agents. This is uncomfortable for most who are used to maintaining the status quo. Many fail to rise to the challenge, the minority that do are recognized and phenomenally rewarded. The next tier of rewards goes to those with the skills to perform the new jobs which naturally are also in short supply. Meanwhile the ranks of students and workers training for the "New Economy" swell. The income gap widens.
(Fig 3) Many countries may find their rich getting richer and poor poorer. In Singapore's case, the talented will get rich faster (box 3), old money may not see their wealth grow like the new rich, and the less talented may still see their income rise, albeit slowly (box 3a).
(Fig 4) Together both groups will cause property prices to go up. But the pressure would be unequal; much stronger for the top end and very light for the lower end. View Part 2