Published March 30, 2009

Mortgage payments worry S'poreans; expats fret over pay

By SIOW LI SEN

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A MAJORITY of Singaporeans worry about their ability to pay their mortgages while expats are fretting over smaller incomes, a survey by Zurich International Life (ZIL) showed.

'I wonder about the result if the survey is done now,' said Andy Robinson, ZIL Asia regional director in a recent BT interview. Singapore is experiencing its worst downturn ever with some forecasting that the economy could shrink as much as 8-10 per cent this year.

Seventy per cent of Singaporeans in the November survey were confident in their ability to save adequately while 60 per cent worry about their ability to pay mortgages. Mr Robinson thinks the Central Provident Fund mandatory contributions accounts for the optimism on savings while job security anxieties are keeping Singaporeans awake over their mortgages.

The survey which involved 212 Singaporeans and expatriates with a minimum monthly income of $4,000 revealed a general low level of confidence in economic recovery. Ninety per cent of expatriates are making changes in the allocation of their wealth, with more going to savings. Eighty two per cent of expatriates report a reduction in disposable income which warranted 62 per cent feeling the need for a change in their lifestyle.

'Part of that is buying less property,' said Mr Robinson referring to the changes in allocation of wealth by expatriates. Foreigners had been big buyers of high-end properties in the past five years. And over the past five years, more and more expatriates have increasingly switched to local terms from expensive expatriate packages, he added.

The survey also showed that priority of saving or investing remains at the top of the list of those asked. ZIL prepares two research reports a year asking Singaporeans and expatriates about their attitudes to financial planning and the correlation between their financial and lifestyle behaviour.

ZIL which began business here four years ago selling investment-linked products has seen an increase in policyholders surrendering their policies, said Mr Robinson.

Part of the Zurich group, ZIL offers life insurance and investment products to affluent customers and expatriates.

To date ZIL has 4,000 policyholders, of which about 1,800 are Singaporeans. In 2008, annualised premiums reached US$71.2 million and he expects sales to be flat this year.

'Clearly we are seeing lower levels of business now compared to third quarter 2008,' he said.

For customers who want to surrender their policies because they have lost their jobs or they want to cut losses, ZIL does offer some alternatives such as a premium holiday, he said.

Minimum premiums of ZIL investment-linked products are $425 a month.

ZIL operates in Singapore as a branch of the Zurich Financial Services Group, an insurance-based financial services provider. Headquartered in Zurich, the group employs about 60,000 people and has customers in 170 countries.