Singaporeans mine gold in ‘second hand economy’ amidst skyrocketing cost of living

8 in 10 Singaporeans admit to purchasing pre-owned goods.

The skyrocketing cost of living may be a beast to many Singaporeans, but for some this means big business. According to a study by online classified ads site Gumtree, many Singaporeans are turning their pre-owned goods into a gold to offset the growing cost of living.

In its survey, Gumtree found out that more than 80% of Singaporeans are already purchasing pre-owned goods, while 76% of them are selling goods they no longer need.

In addition, more than half of those surveyed intended to continue purchasing pre-owned items in the near future.

Terry Wong, Regional Product Director for Gumtree Singapore, said “our observations show that Singaporeans are increasingly leveraging the second hand economy.” Gumtree noted that the generation of additional income was a key motivator for the majority of sellers.

The study showed that almost half of active sellers earned a three- or four-digit annual income from just selling second hand goods and almost half of the participants indicated that selling used goods allowed them to offset their growing cost of living.

Additionally, money-saving was the major benefit for buyers. With 74% having purchased a second hand item in the last 12 months, the average spend per buyer in 2013 on pre-owned items was over $125.
A third of buyers also shared that they could save up to 60% off an item’s retail price when buying a pre-owned product compared to a new one.

Given this booming second hand economy, online platforms for pre-owned items trading are stealing the spotlight.

A spokesperson at Automart Singapore, an online portal for buy & sell cars, said "with COE on the higher side it is safer to buy a second hand car for now and go for a new car later when the loan curbs and COE improves, thus limiting the customers' current exposure."

"As a seller, new cars are expensive and require much higher down payment and hence they bargain for higher price to compensate this (excludes desperate sellers). Given these factors, it becomes more a seller market for second hand cars and accordingly higher returns to the seller," he said.

Evan Lee, co-founder of used car portal Oneshift.com, also said that rising COE prices and tighter regulations have contributed to the rise of second-hand economy in the car industry.

“Given the average Singaporean household, the choice is between a relatively affordable new car or a used car (of a better quality make/model) that is 4-5 years old (of which when the cars have lower COE prices).
The 50% downpayment is still the top concern for car shoppers. And going the used car route makes it financially easier for shoppers,” he said.

This was echoed by Klaus Gapp, CEO of free classified ads website Locanto, who noted that while he cannot disclose actual figures, the "used items for sale" category account for most of the listings in Locanto Singapore.
“In metropolitan areas like Singapore, the cost of living is very high due to ever increasing prices for rent and food. Therefore, buying pre-owned goods is an excellent way of saving money and this drives the presence of online trading platforms like Locanto,” he said.