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Travel & Holiday

Great savings with strong Singapore dollar

With the Singapore dollar at a multi-year high against the Japanese yen, euro and British pound, Singaporean travellers, students, property investors and online shoppers are getting more bang for their buck.
The Straits Times - April 23, 2013
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Great savings with strong Singapore dollar

By Melissa Sim, Cheryl Faith Wee & Jennani Durai

With the Singapore dollar at a multi-year high against the Japanese yen, euro and British pound, Singaporean travellers, students, property investors and online shoppers are getting more bang for their buck.

Travel agencies, in particular, say they have seen a surge in demand - up to a 60 per cent increase - for tour packages to Europe and Japan in the first three months of this year.

The same goes for airlines, which reported a spike in demand for flights, particularly to Japan and London.

Repeat travellers to Japan are also taking advantage of the weaker yen to explore new areas of the country which they might not have considered visiting before.

Those considering an overseas education or buying an investment property overseas have also been tipped into action by the advantageous exchange rate.

Students who have been budgeting for their overseas education say savings on their tuition fees could now go to more travelling.

And those who are already studying abroad say the monthly allowance that they have set aside for themselves can now last them longer than before.

Savvy property investors say the weakened pound, together with confidence in the long-term prospects of the London property market, definitely influenced their investment decision.

Real estate agents here say the numbers flocking to overseas property launches have risen by 40 per cent compared with a year ago.

There were 24 UK property launches in the first three months of this year, compared with 30 in the whole of 2009.

But the benefits of a strong Singdollar are not only felt by the big spenders. Even those who shop online are doing so with less guilt these days.

Online shoppers say they can now afford more items - clothes and accessories - for the same amount of money.

And they are psychologically prepared to spend more because they know the exchange rate is in their favour.

simlinoi@sph.com.sg

cherylw@sph.com.sg

Jennanid@sph.com.sg

TRAVEL

Japan, Europe, here they come

Four years ago, Madam Jaiton Mohd Ghani wanted to go to Japan for a vacation, but the strong yen - 100 yen was the equivalent of S$1.55 then - squelched her dreams. She ended up holidaying in South Korea.

Two months ago, the teacher's assistant was pleasantly surprised to find her dream Japan holiday had become affordable.

"When we went to the Natas fair and saw the price, I decided immediately that it was time to go," recalls Madam Jaiton, 49. The yen had dropped, with 100 yen equivalent to $1.25 and a tour package that previously would have cost about $3,500 a person, was going at $2,700. Last month, she went on a seven-day trip to central Japan with CTC travel with her husband and youngest daughter, 17. The trio spent $8,100 in all, but saved about $2,000 by timing their trip according to currency fluctuation.

The weakening of the yen, euro and British pound is good news to travel-loving Singaporeans, who have begun snapping up tickets to Japan and Europe in larger numbers this year.

Five travel agencies told SundayLife! that they saw increases in the number of tours booked to these destinations in the first quarter of this year, compared to the same period last year.

Chan Brothers, for instance, reported a 30 per cent increase in Europe-bound travellers and a 20 per cent rise in travellers headed to Japan in the first three months of the year. EU Holidays reported as much as a 60 per cent rise in the number of passengers who had booked tours from Singapore to Europe from January to March, compared to the same period last year.

The agencies have jumped into the fray, using the weakening currencies to slash tour package prices for their clients, or upgrade their hotel and dining options.

A spokesman for ASA Holidays says the weaker euro means the agency can charge less for tour packages. A 10-day Europe tour cost $2,988 in 2010, but is now available at $2,588 a person, she says.

European specialist Trafalgar has reduced its rates by about 20 per cent for all tour packages. Its 12-day multi-country Europe itinerary, at US$3,250 (S$4,000) last year, costs US$300 less this year.

Resource manager Steven Phua booked his Japan holiday with CTC Travel last week, after deliberating between Australian and Japanese tour packages.

"I decided to take advantage of the exchange rate while the yen is still low to visit Hokkaido, as I like to expose my kids to nature," says Mr Phua, 42, who has vacationed in Australia with his wife and two children for the past few years. The seven-day Hokkaido package he bought cost $2,288 last year, but now costs $1,888 - a 20-per-cent drop, says CTC Travel senior vice-president Alicia Seah.

With the sudden rush of interest, tour agents have also been introducing new tours, as well as increasing the capacity of existing ones. New tours proving popular include the Takayama Alpine Route in Japan, and Spain, Portugal and Scandinavia in Europe, adds Ms Seah.

Airlines, too, have been feeling the surge. Japan Airlines says there have been more travellers from Singapore flying to Japan in the first quarter of this year, while Air France and KLM both reported similar increases to Europe. All airlines declined to give exact passenger figures, but added that their fares are lower now compared to two or three years ago.

Most recently returned travellers say they really felt the difference in the exchange rate when it came to accommodation and food.

Research analyst Clara Lee, 27, says she was able to do more during her holiday in Spain last October than she had planned, as everything was more affordable.

"I was able to try more fine dining restaurants than I expected, given my budget, while casual bistros and tapas bars seemed like extremely good value. Three-course lunches including wine were going for just ¤8 (S$13)," she says.

She adds that her dollar stretched beyond just food: "I could afford to view art and visit attractions by renowned Spaniards like Dali, Miro and Gaudi. I also got a lot of bang for my buck shopping, Spain being the home of fast-fashion brands like Mango and Vincon."

Finance executive Melissa Hon, 29, who is going to Nice in France and Barcelona in Spain in October this year, says the weakening euro means she can afford to stay in better hotels.

Ms Hon, who is travelling with her mother and sister, says that they realised after some calculations that they could afford to stay at the boutique, centrally located Nice Garden Hotel for ¤115 a night. "For that price in Singapore dollars, we were expecting to stay at a cheaper hotel," she says.

Banking executive Jacqueline Chua, 42, who travels to Japan every year, felt the difference in currency exchange rate most keenly on her most recent trip last month. "I went to Nagoya and Takayama last year and this year, and definitely felt the savings this year," she says.

In Takayama, she stayed at the same hotel, Tanabe Ryokan. Last year, she spent $250 a person a day at the ryokan or traditional Japanese inn, but the rate was down to $190 a person this year.

Legal manager Haslina Hassan, who left for Japan on Friday, now bemoans going to the moneychanger to buy yen months ago, when the Japanese currency was stronger. "I regret not waiting. I would have got at least $200 more of yen," she says.

Nevertheless, the 30-year-old is not going to let that stop her from making the most of her well-timed holiday. "Our number one priority is eating better," she says. She and her two friends have already made reservations at famous Tokyo sushi restaurant Kyubey. She and her two friends are expecting to spend around 10,000 yen (S$124.60) each on a meal there. And with this year's exchange rates compared to last year's, they could save around $120 in total, says MsHaslina.

"You can do a lot with an extra $120," she says. "I haven't got any shopping in mind, but knowing it's going to cost a lot less will make me buy more."

Jennani Durai

PROPERTY

Surge in UK apartment purchases

Just two weeks ago Ms L.Y. Chan, 34, became the proud owner of a central London apartment, an investment prompted by the falling British pound.

"The pound is quite low and property is still quite bullish in London in the medium to long term," says MsChan, a lawyer, who bought a one-bedroom apartment in the Old Street area with a friend.

She cites the restrictions on buying a second property here as another reason for her recent overseas purchase, which cost slightly over £600,000 (S$1.14million).

Just five years ago, in 2008, the sterling's exchange rate against the Singapore dollar was $2.65. Today, the rate has fallen to $1.89 (on Friday). This has made "London properties much more affordable for Singapore investors," says Mr Richard Levene, director of international properties, South-east Asia, at Colliers International.

Adds CBRE's Darien Bradshaw, executive director of international project marketing, Asia: "People are saving 30 per cent all of a sudden."

"Moreover," says Mr Levene, "London is considered a relatively safe place for investment."

He adds that in the last 12 months, Colliers International has seen a 40 per cent increase in the average number of people attending its property exhibitions. The agency launches at least one new overseas property on most weekends.

Not only are people browsing, they are buying too.

Estimated sales figures of United Kingdom properties here have gone up, says CBRE's Mr Bradshaw. He highlights that in 2009, there were 30 UK property launches in the Singapore market, with sales amounting to £100 million.

Last year, estimated sales rose to £550million and the number of launches more than doubled to 65.

"It's just gaining momentum at the moment," says Mr Bradshaw, adding that in the first four months of this year alone, there have been about 24 UK property launches.

Real estate agencies say Singaporeans typically buy property in London, Australia, Bangkok and Malaysia.

London and Australia are usually the top picks "because some investors have children going to these places to study," says Ms Lee Lay Keng, head of Singapore research at DTZ.

Entrepreneur John Tan, 31, who bought his London property in mid-2011 says he had thought the pound was "already low at the time".

Although the pound has fallen even further since he made the £780,000 investment, he has seen some capital gains on his two-bedroom apartment at Imperial Wharf in Southwest London.

"I guess I'll keep it for a while," says MrTan, who is married with two children.

Since the decline of the pound, the profile of UK property buyers has also changed.

Ms Linda Chern, head of international project marketing (residential) at Knight Frank, says the mix of buyers is "more diverse".

She says there is a "wider group of people, ranging from HDB dwellers to landed home owners". Whereas, a few years ago, the buyers were mainly private property owners.

First-time buyers are also making more forays into the UK market.

This could also be due to "investors taking advantage of the attractive exchange rates... to further expand their investment portfolio into overseas markets, such as the UK", says Mr Levene.

And repeat buyers are, of course, not letting this chance slip by.

Says Mr Stephen Ho, CBRE's director of international project marketing in Asia: "In the last six to nine months, we've really seen the increase in confidence."

Previously, he says "we would never sell a £2 million to £5 million property in London off the plan. Today, buyers are just walking in and buying off the plan."

Melissa Sim

STUDIES

Relief for students abroad

Hear that? That's the sound of penny- pinching Singapore students in Europe and Japan loosening their belts with a relieved sigh, as the Singdollar swells against the yen, euro and British pound.

In the last year or so, some Singaporeans studying abroad have started reaping the benefits of a favourable exchange rate.

Second-year law student Wang Jingyi, at the University of Oxford, can afford to eat out more often of late - up to thrice a week, instead of just twice.

And when she cooks her own meals in the three-bedroom house she shares with two other Singaporeans, she can reach for premium ingredients. Think Thai fragrant rice that costs about £3 (S$5.70) a kg, in lieu of "everyday value" products such as long-grain rice which costs 40p a kg.

She can even afford three-ply toilet paper that costs £4 for nine rolls, as opposed to thinner toilet paper that costs £1-odd for six rolls.

Ms Wang, 20, says she is "glad that the exchange rate is so favourable", although she is concerned about the global economy and any issues that may be "a more pressing concern than the quality of my toilet paper".

Her engineer father, 49, and accountant mother, 48, send her about $30,000 a year for her living expenses. In her first year at Oxford, this amounted to about £15,000. But with the current exchange rate, she gets a few hundred pounds more for the same amount in Singapore dollars.

Over in Germany, Mr Wong Seng Yeow, a first-year economics student at the University of Mannheim, says it has become cheaper for him to live there.

His parents - a housewife and a businessman, in their 50s - send him about $15,000 for a year's living expenses.

In 2011, when he spent close to a year learning German in Hamburg, the exchange rate was approximately $1.80 to €1. But when he started his university education in Germany last September, it was approximately $1.60 to €1.

Mr Wong, 23, says: "I buy the same food, use the same products and services, but the same amount of money now lasts about 11/2 months longer."

Ms Yvonne Chan, 20, a first-year liberal arts student in Waseda University in Japan, paid $1,500 less for her second semester's tuition fees compared to her first semester's.

Her father, a 63-year-old retiree who used to work in IT, is funding her education. Her mother is a 56-year-old housewife.

Ms Chan says: "It feels good that my parents do not have to spend as much, even if the savings are small compared to the total cost."

Thrifty students are not the only ones happy. Their parents funding their studies are also welcoming the situation.

Mr Heng Chia Hwa, managing director of a pest control equipment and chemical company, keeps track of the exchange rate every week and calls the weakening pound "pleasant news".

He is paying tuition fees for his son, Yirui, 23, a second-year student in veterinary medicine and surgery at the University Of Glasgow in Scotland. The five-year course will cost Mr Heng about £150,000, including tuition fees and living expenses.

Says Mr Heng, 60: "Fluctuations in the exchange rate are inevitable. My son will still require funds regardless of the situation. The rate is now a lot lower and better than when he was in his first year."

Some matriculating students are already calculating how much spare cash the favourable exchange rate might yield them and how to spend it.

Kirti Upadhyaya, 18, has applied to study art history in either Courtauld Institute of Art or the School of Oriental and African Studies in London. Whichever institution she eventually heads for this September, her dad, 50, who works in IT and housewife mum, 47, will give her a living allowance of $30,000 a year.

The weaker British pound will mean that Kirti might have money leftover after paying for basic necessities like accommodation and food.

She estimates that she will have $1,000 to $1,400 a year to spare and says: "I may use the savings to travel around Britain. I hope to be able to visit cities nearby, maybe make a day trip to Paris."

Cheryl Faith Wee

ONLINE SHOPPING

Better deals at British sites

Five years ago, Mr Jason Song did not bother shopping at British online stores. The robust health of the sterling had made it too expensive for him to buy from them.

That was then.

These days, he shops on British designer website Mr Porter about once a month. Each time, he spends between a few hundred dollars and $1,000 on clothes, accessories and bags, while the Singapore dollar holds up against the British pound.

Says Mr Song, 31, who runs a creative agency: "$1.89 to £1 is very do-able. It used to be more than double. Saving even 10 cents for every £1 is quite a lot."

The growing purchasing power of the Singapore dollar is also luring shoppers who have always been partial to British brands to buy more.

Health-care executive Yew Woon Yuet, 36, has been able to save more than $100 on clothes bought off London-headquartered Marks & Spencer's online store since last year.

Previously, she would fork out up to $2,000 a year for 30 to 40 pieces of clothing for herself, her husband and their two sons, aged five and nine years old.

With the exchange rate at $1.89 to £1, the same quantity of apparel now costs between $100 and $150 less compared to a year ago - a saving of 5 to 7.5 per cent.

Ms Yew says: "A stronger Singapore dollar is definitely good. The money I save goes to more shopping - for clothes from Marks & Spencer or elsewhere."

Still, it can sometimes be a case of penny wise, pound foolish for those racking up shopping bills while the exchange rate suits them.

Student Wilson Wang, 24, admits that with the weakening pound now, he has a greater tendency to splurge on things from British online stores.

About once every two months, he buys art books, magazines and clothes from online clothing stores Asos.com. He also frequents Mr Porter, as well as online bookseller Book Depository.

Compared to three years ago, Mr Wang can now buy double the number of items with the same amount of money. On his usual budget of $260, he can now buy at least two art books, instead of one, and four pieces of clothing instead of two.

"I save in terms of the amount I spend on each item. But, on the whole, I spend a little more," he says of his bigger sprees now. "I occasionally end up spending between $20 and $40 more than usual."

Account manager Lin Jingyin, 28, who shops for clothes on British online stores Net-A-Porter, The Outnet and Asos at least once a month, says: "With a high exchange rate, I think twice about buying things that I am not sure about. But with a lower exchange rate, I just buy them."

Some individuals are betting on the exchange rate to swing further in their favour before checking out their virtual shopping carts.

Student Liao Youqing, 24, shops at least once a month at online stores which ring up purchases in Japanese yen, such as Japanese online retailer Rakuten.

She has recently been eyeing a giant stuffed toy that costs 15,750 yen (close to S$200) on a Japanese online store.

Still deciding whether to buy it, she says: "After conversion, I might save about $10 compared to six months ago. Even a small saving feels like a good deal. I am waiting to see if the yen drops a bit more."

Meanwhile, graphic designer Clarence Aw, 24, is trawling British or European online stores for watches, shoes and bags - something he does about four or five times a year, but which makes particular sense now. Each of his purchases usually costs between $100 and $400.

He says: "If I save a couple of dollars, that will be my lunch money."

Cheryl Faith Wee


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