Who Moved My Singapore Cheese

Interestingly, Straits Times' choice of headlines in this article once again makes me wonder if they think we are collectively a stupid or dumb country. Why is the content of this article, "Former Reform Party member..." but the header "Reform Party man..." ??? It's slightly amusing actually.

Reform Party man wanted by US
By Elena Chong
FORMER Reform Party committee member Balraj Naidu made a brief court appearance on Tuesday for an extradition hearing which was adjourned until next Monday.
The businessman was arrested at his home last week and brought to court on a warrant of arrest.
He is wanted by the US Government on two terrorism-related charges and brokering an arms deal with the Liberation Tigers of Tamil Ellam (LTTE) .
No charge has been laid against him.
The request for his extradition was made around the middle of the year.
Family members of Mr Naidu were in court with his lawyer, who declined comment.

Australian House Prices May Rise Too Fast, RBA Says


2009-09-29 04:18:26.445 GMT

By Jacob Greber

Sept. 29 (Bloomberg) -- Australian house prices may surge too fast, hurting low-income families seeking to buy or rent homes, said Anthony Richards, head of economic analysis at the Reserve Bank of Australia.

"Looking forward, the risk is that we might move toward undesirably strong growth in Australian housing prices," Richards said today at a housing conference in Sydney. "This raises a number of concerns, which seem to be widely shared in the community."

To contact the editor responsible for this story:

Recently I have stopped posting as frequently as I used to, partially because I got tired of my own rantings, and partially because I felt it wasn't doing much good going by the response I read on Straits Times.

I realized that bad social circumstances can never be truly or genuinely empathized with by people outside of a situation, and so I decided it was useless going on and on about issues as our Ministers will probably be unable to even begin to apprehend, even if they tried.

In any case, I've decided to shift my blog more towards the theme of HOPE. I have had the good fortune of seeing what life can be like outside of Singapore first hand. Although the world is smaller now and many of us have been around the globe on holidays and stuff, I believe that it takes a person to actually experience working and living abroad to know the good and bad and decide for themselves if this Singapore lifestyle of slogging your whole life away for a bare-minimum set of house, car and retirement savings is truly all the potential life has in store for him or herself.

As cliched as it may sound, I find many Singaporeans' stories to truly be the case of a frog dying, slowly but surely and unknowingly, in a pot of water slowly brought to boil.

I do not know if my intention will be achievable, or whether the stories will be inspiring or if it will be to the opposite, but I intend to document the stories of some ordinary Singaporeans who have managed to, as Senior Minister Goh Chok Tong once said, "quit" Singapore.

This series of interviews and stories will be under the label, "A Life Less Ordinary". So look out for it!

Just saw a latest signature number 605 on the Online Petition for affordable housing for Singapore...here it is...

8:57 pm PDT, Sep 15, Singaporean Citizen, Singapore
The two biggest expenditure items for any Singaporean will always be housing and transportation. Most are working a lifetime to pay off debts and just making by each day. By putting citizens into debt, it makes them easier to "control". There are a few papers and books discussing this issue of debt as a new form of slavery. I also do not subscribe to the notion of "willing buyer - willing seller". There are cultural norms that are more or less imposed on us by parents and peers. Taking a middle class example of a male university graduate who graduated at the age of 25. He and his significant other have at or about 5 to 8 years to save up for housing and marriage. Upon commiting to marriage, cash and cpf sums are wiped out. They will stay wiped out for the next 10 years at least. With kids, it will take a much longer period to even see your savings account grow. Many buyers in the current HDB resale and new DBSS market are paying such prices because the only other alternative is to stay with parents. Staying with parents just opens a whole new can of worms. I want to put off buying a house for now. But we are not that young any more. Buying a BTO project and waiting 4/5 years is a option as a last resort. Buying resale requires large sums of cash for COV, which is something I do not have. This property appreciation business does not benefit the vast majority. How many people are able to sell their homes and realise the gains? I do not know what is the best course of action now, except to wait. My relationship is strained as me and my girlfriend are left in limbo and unable to properly start a new family nucleus. There are many counter arguments to the above points. But taking a step back, it can be acknowledged that the situation is far from acceptable. What steps is the government going to take? What actions are we, the citizens, going to take?

The best ways to learn from our mistakes, is to carry them with us.

Talk about People Power! After a few weeks of citizens appealing to the government via the Straits Times and other alternative medias such as blogs and online petitions, Minister Mah has moved to curb property speculation in Singapore with immediate effect in today's parliamentary meeting. [ See Straits Times Report ]


While this is great news it will take time for the public housing sector to start showing a price decline due to correlation, if at all. If the HDB resale market does not cool down even with the curbing of speculation in the private housing market, then it is apparent that the supply-demand dynamics in the HDB market needs to be looked into and worked on directly. I wait with bated breath to see where this road leads us in the next few weeks or months...Below is the ST report for your reference...in the mean time, I thank Minister Mah for finally doing something that makes sense and not cents

THE Government has stepped in to temper exuberance in the property market and preempt speculative bubble from forming.

With immediate effect, it will make it tougher for home buyers to borrow by disallowing interest absorption scheme and interest-only loans to prevent excessive speculation, National Development Minister Mah Bow Tan announced in Parliament on Monday.


This means that banks and developers will not be allowed to offer housing loans whereby the borrower only pays the interest and defers repayment of the principal to a later date.


Mr Mah also announced that the Government will reinstate land sales through its confirmed list system and increase the supply of sites under the "reserve list". Sale of state land under the confirmed list was suspended for the first half 2009 Government Land Sales (GLS) Programme to help stave off oversupply risk as the property market here was then on a downtrend.
Instead, state land was only made available under the 'reserve' list system for the first half of the year.

Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable.

By contrast, land parcels under the confirmed list will be tendered according to scheduled dates - which could translate to more residential property launches.

Mr Mah said speculation was trickling back into the property market and the measures were taken to prevent the overheating.

New home sales in Singapore have shot through the roof recently. Resale prices of many popular projects have also risen from the lows early this year.

The report mentions citizens' concerns with soaring HDB prices (about 35% increase over 2 years) and quoted a NUS Real Estate professor (程天富), who said that the HDB flats, if based on debt-to-income ratio, is still affordable. He then went on to state that one of the public's concerns, instead of affordability, is that of the high COV required these days in the market, meaning to say that instead of the willingness to pay over 30 yrs for the current HDB prices, it is the inability to fork out the upfront cash required that is worrying us. The report is also peppered with mentions of the public asking for the current $8k income ceiling to be raised, and for the government to scrap the COV system etc etc.

I have a point to make below but let me preface that with my views, which might run contrary to what some fellow petitioners have suggested, in that the COV system is a necessary evil, and that it should not be scrapped; and yes, the $8K income ceiling is an archaic benchmark level and the implementation of which is currently a blanket system that fails to take care of citizens in that it does not take into account the number of dependents in a family.

I think that the COV is important because it limits the financing power of buyers in a quickly rising market and provides a price floor for the owners against quickly dropping prices. It acts as a dampener to the price volatility of HDB prices and it gives buyers an idea how much over and above the recent market prices they are paying for. Once the COV system is scrapped, what we have in a supply crunch market like the current one, would be rampant outbidding by desperate buyers who are throwing their financial prudence to the wind since they are able to finance that irrational decision with a bank loan.

$8K income ceiling? Well that is a self-explanatory issue once I had read about the plight of a certain petitioner whose family had 2 kids and 2 non-working old folks (note I do not classify them as "retired") living together. I do not pity those whose family planning is careless and irresponsible, with 3 or more kids when their earning powers are obviously not sufficient for such a large family; but 2 kids? Is that too much? Is a combined income of $8k (stress: with both husband and wife working) sufficient for a couple who has 2 kids and aging parents in Singapore to purchase a condominium apartment large enough for their family of 6? Where is their government-mandated CPF retirement minimum sum (currently at $117,000) going to come from? Would it drop from the sky? Also note that even that sum will only afford a very modest lifestyle in retirement.

Finally, my point is this. I do not think our HDB flats are affordable even if you use debt-to-income ratio. The problem is that in Singapore, we have relatively fragile careers (apart from those plying their trades in the government sector) that can be reduced from hero to zero in one economic policy change or industry trend shift. (Just ask the manufacturing-plants PMETs how secure they feel about their future) The income-to-debt ratio does not take into account the long duration of our mortgages often necessary to keep it "affordable", nor does it take into account of the fact that our household income are dependent on both parents being locked in the workforce. In other countries, it is often a choice for the wife to be working or to be a home-maker.

Next, for the elephant in the room; nobody wants to admit it - apart from the new HDB apartments in the "immature" a.k.a "ultra-ulu" locations (such as Punggol and Sengkang) which are only available to us if we got lucky with the bi-annual ballot, most of the resale market apartments in mature estates are really such sh*tholes they are not worth the high absolute prices being asked for in the market today. Not to mention most of these "mature" flats come with shorter remaining lease of around 70 to 80 yrs lease balance, which lends weight to the rich-gets-richer-poor-gets-poorer situation in Singapore because of inheritance issues.

Many young Singaporeans wish to upgrade to something better eventually. But once locked-in and laden with such high mortgages (relative to absolute wage levels here), many of us are aware that the fight to move upward in Singapore in this lifetime is perhaps so critically threatened that we might as well forget about it once we sign our names on the HDB lease. Our next 10 years or so of our mortgage payments will be going primarily towards interest payment and very very little principal owed is actually paid off. Our "asset" wealth is not going to go up by virtue of our faithful monthly payments unless there is a significant appreciation in HDB prices going forward from this point on. HDB is over-looking the fact that their apartments are really not worth that much prices in the alternate reality had they been building sufficient supply to meet demand.

HDB mentioned that they are limiting the number of new flats supplied (to 2,500 new flats in 2006) because despite a figure of 25,000 new marriages last year, there was really only 15,000 applications for new flats or 1st timer housing grants in the resale market, explaining further that the discrepancy is due to foreigners getting married in Singapore.

This is a REALLY DUMB explanation because HDB is still not admitting that many Singaporeans are looking for new flats in locations they want and not PongKang (Ponggol+Sengkang), or are not willing to wait 3 to 4 years for a BTO flat and are hence lingering in the resale market, or are unwilling to pay the high prices for the market rates, hence ONLY 15,000 couples were "lucky" enough to get a good ballot number or decided they couldn't wait any longer and finally took the plunge into the resale market.

The 10,000 balance of the figure did not signify that they were not looking to purchase a flat!? It signified that many more are waiting, lurking in the market, hoping that their financial prudency will pay off finally, building up a pent-up demand. But alas, HDB will never see it that way. They will rather worry about their bottom line in the event that they have an over-supply of flats. I ask aloud if that is such a terrible thing? Has HDB forgotten its DNA? It is NOT a FOR-PROFIT organization.

Confession: I have been checking Singapore's very own Online Petition for Affordable Housing almost a hundred times a day, waiting to see it hit the 1000 mark and finally proclaim to our millionaire ministers, "The people have spoken !". Eat this! But alas, the numbers for the petition has been rather disappointing up till now, although the poor turnout till now does not diminish the vindication I have for this issue and it is continually fired by the comments I read in the petition. Maybe you'd like to hear some of them...so here you go....

Personally, I am darn bloody exhausted by my months of unsuccessful hunt for a reasonably-priced HDB apartment and reading all the angst online shared by other Singaporeans and then reading once again in the newspapers another "oh come on, it's still affordable" report. And so I have no more energy to talk about this "affordable housing" issue. Here is my one last hurray on this topic. Our dear Minister for National Development Mah Bow Tan said the below quote, on 6th Sept, Sunday's Straits Times article, " Pinnacle in name, and pricing too?"

"In year 2006, we were building about 2,400 new flats. This year, we are
building about 8,000-plus new flats. Supply has gone up to meet demand. That's
why HDB prices have gone up but they have not gone through the roof."

I have always exerted that this current unfortunate price hike in the HDB resale market is probably not so much by design as it is by the collective failures of HDB and its related ministers, in providing a sufficient supply of housing in view of the heightened demand arising from our increased immigration count; hence resulting in a supply-crunch led property "boom" during the worst economic slump EVER experienced by Singapore, period.

All that are old arguments, but the above quote by Mr. Mah has led me to think this - Is it not the fact that 3 years ago, in 2006, we should have been building much much much more than 2,400 flats? The fact that our HDB BTO projects take 3 to 4 years to complete suggests that our current supply crunch is a direct result of that miserable output 3 years ago.

Singapore has always had a rather consistent number of marriages per year, coming in at around 23,000 to 25,000 per year. [ See data ] Even if you discount divorces and annulments of about 6,000 to 8,000 per year (which we shouldn't since logically every separated couple actually increases the housing demand by 1), there should be around 15,000 new homes required for these newly weds every year. Even with an aggressive estimation of 40% of these young couples to be private housing yuppies, that still leaves us with a very very conservative estimate of demand for AT LEAST 9000 new flats every year resulting from marriages, disregarding the effect of newly minted permanent residents who are able to purchase resale flats in the following 2 scenarios without being already accounted for in the marriage statistics;
1) Individual, over age of 35
2) Individual, under age of 35, but has another PR sibling to co-purchase the flat (even though a Singaporean under age 35 is not allowed to do so with his/her sibling!?! How counter-intuitive is that!?!)

Now you may wonder what our numbers for immigration is like and how it may impact our resale HDB market. I do not have the figures for 2006, but let's look at 2007 and 2008. [ See data ] In just the first six months of 2008 alone, there were 34,800 newly granted PRs and 9,600 newly granted citizenship, compared to 28,500 and 7,300 in the first six months in 2007 respectively. Granted, not all of them are looking to purchase a flat or even a condominium because some are merely temporary guests despite the apparent interest in staying longer, this packs approximately 70,000 or more new individuals into our housing market each year. (using 2007 figures ~ approximately 35,000 new PRs and Citizens per half yr x 2)

It doesn't take a Math genius to figure that we need much much more than that curiously pathetic 2,400 new flats output in 2006. What we needed to build 3 years ago, even after heavy discounting, is more like 24,000!!!!! What was HDB thinking about? Now, coming back to 2009, with all the inflationary pressure the housing market is putting on Singaporeans, Mr. Mah comes out shooting from the hip with a "we are now building 8000-plus new flats this year" ?!?!?

Pardon me if I draw the wrong conclusions here, but this seems more like an intended, policy-driven asset inflationary move by our PAP leaders that led to this current social-economic fix that is biting at many many Singaporeans, especially the young, first time aspiring home-owners. While it is possible there exist a good political or economical reason for this choke on housing supply, I think anyone in their right mind will agree the above demand vs supply figures are waaaaay out of whack for the proper functioning of a country, least of all a land-deprived island. If such is the case, I ponder the necessity for HDB's existence since a completely free market would almost seemingly lower the prices of housing more than one that is monopolized by HDB. In retrospect the $30k first-timer grant is pretty insignificant and almost serves as but a veil over the bigger picture of purposefully inflated public housing.

If historical performance is anything to go by, I do not expect much to come forth in the form of acknowledgement or apologies from all concerned ministries or ministers for dropping the ball big time on this one. BUT, please please please please just oh play a little nicer and REFRAIN from making anymore "it's still affordable" comments in the papers because it is just so unbearably antogonizing to us. If you have no solutions, please just shut up.

P.S The online petition for Affordable housing for Singaporeans have gotten underway and I'm glad to say it has now reached a more respectable 3-figure, although it is still far from the targetted 1000 signatures. Please show your support if you feel that our government is not doing the right thing with the HDB market, by visiting the link below. Thanks!

http://www.thepetitionsite.com/1/lower-hdb-valuations-or-build-more-affordable-hdb-housing-for-singaporeans

I refer to Mah Bow Tan's comment on Singapore's HDB market on Straits Times today

'The flat prices would probably go up ... by 1 per cent, 2 per cent,' said Mr Mah. 'It will just keep on going up if the economy recovers as people expect, and if confidence returns but affordability will always be there."

As it is, Singapore is seeing record prices on HDB scored during a global economic crisis and this is obviously a failure on HDB's part in matching supply with the increased demand. Mah, as the Minister for National Development, has not acknowledged this and instead, attributes this to the "confidence" and "recovering economy"?

With the number of newly minted PRs and natural rate of demand for housing (arising from Singaporeans marriage and single Singaporeans reaching the age of 35) easily outstripping the supply of flats several times over I feel it is his responsibility to manage the situation and take some due heat for dropping the ball this time.

Instead, he made an entirely unsubstantiated statement about how "affordability will always be there", as well as the below curious little statement. He says...

'We subsidised you when you buy and we increased the value of your flat when you live in it and... facilitate you to monetise it when you grow old. This is the best form of investment and welfare for the people.'

A few questions spring from this. Who is "we"? Who is "you"? It reeks of snobbishness and it irks me no end. With the acute lack of affordable housing for this current generation of first time buyers, HDB provides no solution when they decided to whip out another paltry 1400 flats, this time in an even more "ulu" part of Punggol. These flats require 3 years or more to get to the market. The failure of supply meeting demand is NOW. It is a mistake already committed by HDB and Mah.



With respect to the claims that HDB's prices act as a welfare from him/HDB/PAP (whoever wants to lay claim to this credit pls go ahead) to the people, I'd much rather my Singapore be not as congested as his or their version which then lends to the increased in prices, I'd much rather being able to retire with my own savings I managed to put aside (because my mortgage didn't cost me as much money ) than to rely on what is potentially a transient government policy to buy back the tail end of my flat's lease. Will you, Mr Mah, guarantee that the policy will always be there in 30 yrs when the generation Xers and Yers are looking to retire?



Mr Mah, we are not talking about a handful minority of poor and destitute here (which is another can of worms), we are talking about 80% - 85% of Singaporeans here. We ARE the people you are supposed to serve, and WE don't like to rely on events outside of our own control for retirement planning. Nor do we like to count on downgrading our flats in our twilight years in order to retire. I mean, would you like to be in the people's shoes?







With all due respect, Mr. Mah, we (grudgingly) pay you good money, more than 2 million Singaporean's taxpayers' dollars every year, to do a good job for us. Housing inflation during a recession is no good. An untimely comment like this from you will only further worsen the situation.



Maybe you have been too busy focusing on the dazzling casinos. But please have a heart and start "convincing us that our lives will improve" as SM Goh has suggested.