Friday, March 1, 2013

Bursting The Bubble

The government has decided to revise the development charge (DC) rates, with the steepest increase targeting the commercial and industrial sectors.

Four sectors in the industrial segment will see hefty increases of between 14 and 26 per cent. Woodlands, Senoko, Sembawang, and Yishun sectors will be slapped with the stiff 26 per cent. For the commercial sector, the average increase will be 24 per cent, with Yishun, Sembawang, Woodlands, Choa Chu Kang and Jurong West hiked highest at 39 per cent. Unlike the wages, there's not co-payment for these charges. The employers are in for a rough ride.

By contrast, the levy for landed homes will increase only by an average of 4 per cent in some areas, with the largest increase of 15 per cent for properties in Tanjong Katong, Joo Chiat, Telok Kurau, Upper East Coast, Siglap, Bedok and Marine Parade.

Analysts attribute the relatively smaller increase in the residential segment to the government's wait-and-see approach. But what are they waiting to see? Either the cooling measures are to meant to cool the residential market or they are not.

There was a report last weekend about 44 percent of high-end non-landed properties under construction being still unsold.  Besides these 4,077 units, 500 completed homes in the red hot zones of districts 9,10 and 11, where the really rich people congregate, are also left high and dry. These are the guys who moan loudly about having to pay $300,000 more for their Ferrari F12 because of the new car taxes.

The folks in charge can't back pedal this time if the Gini coefficient is to be addressed. You can't pretend to help the poor while throwing out lifelines to the wealthy. Money is a zero sum game, you primp one group, you destitute the other. Like a festering boil, the bubble has to be pricked before the suppurating wound infects the rest.

17 comments:

  1. A Millionaire Minister is so honourable meh?
    Will increase the tax burden on himself meh?
    You really believe this?

    GST is to help the poor?
    PAP is on the side of Singaporeans?
    ROFL.

    Is a "good PAP politician" an oxymoron?

    ReplyDelete
  2. Man complained to the police: My brother is going crazy, he is behaving like chicken
    Police: Then send him to Woodbridge lor
    Man: But I also need the eggs he lays everyday leh!

    Neither the HK govt nor yours are serious about pricking the housing bubble and slaughter the egg=laying hen, so more wayang la. And the source of it is the money to speculate is the toilet paper currencies printed by the Fed (and its sister central bank the PBoC), BoE, ECB and BoJ. Enjoy the weekend!

    ReplyDelete
  3. Any of these ministers own 10 investment properties?

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  4. Our PAP Govt's past policy of treating affordable HDB flats as a raid on our treasury is now in fact admitting that overpricing our flats is a mistake, hence the Minister has delinked them now.

    Can our PAP Minister afford to make this kind of mistakes? We are talking obout owners being forced to pay for unnecessary high mortgages spread over their working lifes here while that Minister is still enjoying some kind of monetary gain by virtue of having conned many people into paying for something extra that was not really payable to begin with.

    If prices has been delinked, how come we still can't see the prices coming down? Why is there still a big gap between what they pay to the contractor and what buyers are eventually paying? Why are there no transparency on how new HDB flats are being priced?

    In this connection, they are still not very generous with the truths unlike those LKY's hard truths, aren't they?

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  5. SME is going to have tough time. My guess is that they push the blame it on 'limited' foreigners.

    ReplyDelete
  6. sometime you dun need to even buy commercial properties to make money.... just collecting rental income by subletting tendered properties

    no need for much capital outlay, high returns on investments







    ReplyDelete
    Replies
    1. oop .... i forgotten to add;

      WHO ARE THE PRIVELIGES FEW?

      Delete
    2. The privileged few are those who can still afford the additional ARF and property tax hikes.

      Delete
  7. Speaking in a Bloomberg Television interview, Tharman Shanmugaratnam said "Some correction in prices will not be out of order". That should confirm that the "cooling measures" introduced so far were just half-hearted efforts.

    ReplyDelete
  8. HDB flat in Bishan just sold for $1.01 million, so how can Tharman say there's no bubble?

    ReplyDelete
    Replies
    1. maybe a bubble in the brain is called a stroke.

      Delete
  9. Reading George Orwell's Animal Farm when I was 14 and reading it when I am 40 is different:) pun intended

    ReplyDelete
  10. THe world will be a better place without politicians.

    ReplyDelete
  11. Once asia becomes expensive, the rulers will withdraw their investments and go somewhere. Jobs will be lost, properties will crash, bubble will burst.

    ReplyDelete
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