March 24, 2017

18
PSI
CONNECT WITH US
 
 

Tengku Dato' Sri Zafrul Aziz (Group Chief Executive Officer, CIMB Group) and Shahnaz Jammal (Group Chief Financial Officer, CIMB Group) at the CIMB Group Holdings Berhad 2016 Full Year Financial Results Press Conference in Kuala Lumpur

by Daniel Yap

CIMB is setting their sights on the SME market with the new BusinessGo account, a high-interest current account which waives many banking transaction charges.

The announcement came just ahead of CIMB’s FY16 group performance report, which was headlined by a record group revenue of RM$16.07 billion (S$5.09 billion). CIMB’s Singapore profits shrank by 36.2 per cent to RM241 million (S$76.32 million), however, on the back of slower loans growth and higher commercial banking provisions.

The Middle Ground needs your support to continue serving up credible, balanced and independent news. Help us make a difference by being our patron! Thanks!

In Singapore, CIMB hopes to capture SMEs with attractive terms under BusinessGo. It offers 0.78 per cent interest on accounts that meet the minimum monthly average of $30,000 and an additional 1.1 per cent on the first $100,000 as long as the company makes $20,000 of outward telegraphic transfers a month. This beats typical business current account interest rates that hover at or are barely above 0 per cent.

Fee waivers are also part of the BusinessGo offer. Cheques are free, as are GIRO and payroll transactions, while outward telegraphic transfer fees are waived on transactions above S$5,000. Banker’s guarantee commissions, which can be as high as 1.5 per cent at other banks, will also be waived if the client places an equivalent-sum fixed deposit.

Ms Ng Wee Lee, Head of Commercial Banking at CIMB Bank Singapore, said that the bank is able to offer this deal to customers because of its low overheads – CIMB runs only two retail branches in Singapore. She added that the bank would “just barely break even” on this offering.

Ms Ng said that SMEs are typically unable to access better banking terms because they are considered too small for banks to spend time customising solutions for, and that CIMB hopes to be able to offer them cost savings in hard times so that they will remain loyal customers when times get better.

 

Feature image courtesy of CIMB Group.

If you like this article, like The Middle Ground‘s Facebook Page as well!

For breaking news, you can talk to us via email.

 

skillsfuture_300x250

by Ryan Ong

There may be too many property listing sites for Singapore

WITH the addition of two new online services last year (Ohmyhome and Yotcha), the online property market has gotten crowded. Along with PropertyGuru, 99.co and StreetSine, all of them are now locked in a constant fight for your attention. And they all provide the same basic service, which is comparison.

All of this is supposed to be good for “the market”. Property agents, buyers and sellers are supposed to have it easier than ever. Listing sites are much cheaper than traditional marketing methods, such as classified ads – 99.co charges just $588 per year for 100 listings, while PropertyGuru (which is the granddaddy of property sites in Singapore) charges $2,240 per year.

Contrast this with traditional print advertisements, which can end up costing those same amounts for just a single ad.  And of course, buyers now have the luxury of looking for property on their phone, on the bus or at home.

In some respects, these sites have succeeded in changing Singapore’s property market. Some of the changes that have been caused by these sites are:

  • Buyers are quicker at spotting abnormal prices
  • The property business is becoming more entwined with the online media business
  • Buyers are somewhat better informed

You, our readers, are the reason we exist. Your contributions allow us to bring fair and balanced news to everyone, regardless of the ability to donate. Support us by being our patron.

 

1. Buyers are quicker at spotting abnormal prices

Most property portals, such as 99.co or StreetSine, don’t just list the price of a specific property. They also show the prices of other properties in the same vicinity, which lets buyers work out the average (or median for the more mathematically inclined) price per square foot. For example, look at this screenshot:

unspecified

 

You can see almost immediately if a unit is exceptionally expensive or cheap. Here’s another example, which also tracks prices in the general neighbourhood:

unspecified

In the past, buyers had to dig through records themselves to check transaction histories. Portal listings practically guarantee every buyer is less likely to get ripped off, even first-timers who may not know where to check the price history. (You can check the Urban Redevelopment Authority’s records here by the way.)

The ease of information impacts our property market in ways that go beyond the portal’s user numbers. Even casually browsing the site could influence buyers and sellers.

 

2. The property business is becoming more entwined with the online media business

One major difference to the property market is that now, sellers have to fight for online visibility. Fewer buyers will walk around a neighbourhood for two hours, shopping for potential sales. They find their prospects via price and location filters on a portal site.

This leads to property agents and developers now having to think like media companies, instead of just real estate experts. If someone types “condo-jurong-under $800,000” into a search bar, every site wants to be the first result they get. As such, an increasing number of developers and agents are now also learning to think in terms of Search Engine Optimisation (SEO) and content marketing. In Singapore’s property market, “e-commerce” will soon lose its meaning – e-commerce is commerce.

At present, developers and agents are basically paying portal sites (or even private bloggers) to get them visibility. But it’s just a matter of time before they learn to produce their own online content.

Which leads to the third thing…

 

3. Buyers are somewhat better informed

Property news used to be esoteric. Go back to the 1980s; issues like stamp duties and deferred payment schemes were random words that made no sense to buyers. Today, most buyers – even those who are buying their first home – have some familiarity with concepts like the Qualifying Certificate or Additional Buyer’s Stamp Duty.

They can’t help it. Portal sites fight tooth and nail for high visibility online and that results in a non-stop deluge of content. Google one project and you’ll find a few hundred pages breaking down the pros and cons, and speculating on potential gains. And in order to get ahead, portal sites also churn out information on how loans work, what agents do, what the Option to Purchase is, and so forth.

That’s all a sneaky way to get visibility. When you type “what is an Option to Purchase”, every portal site wants to be the first to answer your question.

This results in buyers who are somewhat better informed. I say “somewhat better” because, within the mass of content, buyers are also absorbing information that persuades them to buy.

 

What hasn’t and probably won’t change no matter how many portal sites we get?

Portal sites are also credited with big industry changes, despite evidence to the contrary. They are:

  • Decreased use of property agents
  • Major changes in property prices

 

1. Decreased use of property agents

This is the number one accusation hurled at listing sites, like Yotcha. But that’s putting the cart before the horse.

In 2010, only 11 per cent of HDB resale buyers and sellers handled transactions without an agent. By 2013, that number was up to around 25 per cent. HDB itself has concise guidelines for buyers and sellers wanting to do this. You’ll note that Yotcha (and the app Ohmyhome, which bypasses the need for property agents) came about in 2016.

In other words, services like Yotcha came about as a response to fewer people using property agents. They are not a “cause” of it.

The commission of a property agent in Singapore is around 2 per cent of the sale price for sellers. On a $350,000 flat, that’s a hefty $7,000. So it’s not surprising that most people will at least try to muddle through it first and then call in an agent as a last resort.

Of course, this isn’t to say that Yotcha won’t compound the problem – it is too new to tell. But in the words of Billy Joel, it didn’t start the fire.

 

2. Major changes in property prices

So price comparison drives prices down, right? That’s a supposed benefit of comparison platforms, but we should be careful not to exaggerate the impact.

Property prices move for a huge variety of reasons. Property prices in Singapore are going down because of cooling measures by the G, a weakening economic outlook, fewer rich expats due to the slump in oil and gas and finance, and many other possible factors. One of those many factors may be the increased use of portals and price comparisons. But we can’t know that for sure or guess to what degree it contributes to falling prices.

The flip side is also true. If there’s a huge hype for a particular area, prices will be inflated. And the comparison platforms will reflect and reinforce that. When you can see everyone hiking prices, you will too.

It’s more accurate to say that various portal sites reflect the market sentiment. Property portals probably won’t be the catalyst for major price changes, no matter how many of them we have.

 

Featured image House/Home Inspection by Flickr user Mark Moz. (CC BY 2.0) 

If you like this article, Like The Middle Ground‘s Facebook Page as well!

For breaking news, you can talk to us via email.

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

Save

by -
0 0

by Ryan Ong

EVERYTHING is faster and more efficient in the age of digital banking, including going bankrupt. When you consider you can get four times your monthly income in cash, in 15 minutes, it’s pretty amazing we’re all not stress eating caviar while looking at our monthly bills. For those without self-control though, the Association of Banks in Singapore (ABS) has made a help package – in the form of a new debt consolidation programme:

by Ryan Ong

AIRLINE ticket prices work like a Singaporean driver’s turn signals: random, or based on rules that only make sense to them. That explains the rise of airline ticket comparison sites. But before you start booking that trip to Syria (or whatever’s a popular holiday destination these days; I don’t keep up with tourism trends), you should know a few things about how flight comparison websites work.

by Ryan Ong

SINGAPORE’S wealth-per-adult is up 1.4 per cent so we’re still one of the richest countries in the world despite recent slowdowns. The source comes from a report by Credit Suisse which will shortly be puzzled why a third of our population now hates their guts.

I wouldn’t have done it if I were you, Credit Suisse.

See, praising Singaporeans about our wealth is like congratulating your buddy on his million dollar insurance payout. A payout that came after he lost most of his face in a horrific bus accident. You don’t know if you’ll get a smile or a punch in the mouth. Singaporeans are wealthy by comparison to many countries, but there’s a price to it that not all of us have agreed to pay.

by Ryan Ong

TWO hundred and forty per cent interest. That’s what was charged to a local business owner, who just managed to dodge the moneylender’s attempt to have him declared bankrupt.

Licensed moneylenders, who provide “short term loans” or “payday” loans, are not a plague unique to Singapore. They’re everywhere in the world, because sooner or later every criminal learns it’s easier to wear a tie, and use contracts instead of guns. And as for laws and regulations, our moneylenders are geniuses at finding loopholes.

by Ryan Ong

FINANCIAL technology (Fintech) is really catching on, and last week, Singapore just hosted the biggest Fintech convention in the world. Amid the expected rah-rah, there were a fair number of banking executives who were walking around with shark-eyes.

Despite their “we should look for venues to work together” speeches, I doubt anyone was fooled as to why the banks were really there: they were scoping out the competition. They were likely working out whether they were going to kill it, or kill it and then eat it afterwards. Here are the Fintech ideas that banks are already “stealing”:

by Ryan Ong

THERE is a slight schizophrenia regarding Fintech in Singapore. On the one hand, we’re the sort of people who will walk three blocks to throw a candy wrapper. We like well-defined rules, and Fintech is inherently disruptive to the rules. On the other, we like to complain we’re not innovative enough, and really want to do something about it. So the regulatory sandbox proposed by the Monetary Authority of Singapore (MAS) is a nice compromise between these two conflicting impulses. Now, new Fintech companies will be allowed to disrupt as much as they like – within a fixed space:

by Ryan Ong

INSURANCE is like the spleen, or the pineal gland. No one except a handful of specialists can explain in detail how it works, but we all know it’s important. For the longest time, insurance was a thing you bought because everyone said it was important, and you kind of hoped the payout would be there when you need it. It’s also a huge, clunky industry burdened by middlemen, paperwork, and asymmetric knowledge (more on that below). Industries like that invite disruption from the Internet: