Monday, March 11, 2013

Houses As Poker Chips

After being challenged in parliament, the obtuse National Development Minister Khaw Boon Wan "clarified" that the delinking of public housing prices from the resale market was actually a "discount". Then on Friday, he said HDB has delinked BTO prices from resale prices only in mature estates, another variant of his evasive definition of delink.

Even his pledge that prices of new flats "will become almost 30 percent cheaper" cannot be taken at face value. You have to literally pin him down on what dictionary he uses for his loose language. And hell will have to freeze over before he reveals the actual costs of construction and the obscene profits churned every year.

Apparently there was a ruling 4 decades ago that flats can only be sold back to the HDB. A sensible directive no doubt aimed at cutting out the speculative element in public housing. So why does the Minister not exercise the moral courage to restore the original objectives of the pioneers like Lim Kim San, whose simple charter was to provide a roof over one's head?

It is revealing that Khaw plans to price the "cheaper" flats at 4 times annual salary instead of cost plus overheads, or less "subsidy" if you still believe that word is real. That's like the greater fool theory of the stock market, always targeting another fool to pay a higher price. Going back to the fundamentals was never in the equation.

Khaw's quibble is that some 800,000 owners are collecting rent from their units instead of living in them. "They will suffer if there is a collapse in the rental market," that's what he said. Suddenly, his attention has shifted from those in dire need of basic shelter, to those who are capitalising on "subsidised" public housing to play the real estate market. Suddenly, he has veered from the needs and wants of genuine home owners to the speculative lot who pick up choice properties to flip for a quick profit. And he actually admits he purposely avoids meeting new demands to protect those making money from rentals: "If I keep on meeting new demand, I am actually hurting the many home owners who now rent out their own properties." BTW, where do these guys stay if their houses are rented out?

Khaw tried to justify his soft play of several rounds of property cooling measures instead of just one bold move to bring the price down 30 percent or 20 percent. His cautiousness is hard to understand, given that three tight slaps have been roundly delivered at GE 2011, Hougang by-election and Punggol-East.


  1. KBW asked his predecessor MBT: "Can we make HDB really affordable?"

    MBT: "That will raid our reserves!"

    Not getting a satisfactory answer, KBW approached his boss: "Can we make HDB truly affordable?"

    Boss: "As we recalibrate left a bit, right a bit, don't flip flop and turn upside down. Don't abandon value$ and principle$ which are important, and which have gotten us thus far and which remain important for us for a long time in the future."

    1. Desperate, KBW sought audience with the Supreme Leader: "Can't we drop the price of HDB flats a little?"

      Supreme Leader: "85% of Singaporeans are living in HDB flats and we intend to keep the values of these homes up. It will never go down."

    2. "You silly cow, why make it cheaper when we are making so much money out of daft Sinkies right now. Just do your job like MBT and wait for your pension" bellowed the boss, knuckle duster ready in hand in case Khaw tried to argue further.

    3. If he can find a way to pay onlu $8 for his bypass surgery then he can find a way to lower the costs of buying flats for young Sporean first timers.

    4. I think we should not doubt that they will find a way, which has been mentioned by someone, that would result in a much shorter lease of say, 60 years. I will never wish for that of course, but when a push becomes a shove, they may be desperate enough to do just that. After all, what alternatives do Singaporeans have, except to vote opposition to register our disagreement.

  2. I am one of those owners you mentioned. For the past 8 years, I have been renting out my HDB 5-room flat and I live in a 2-bedder private condo apartment. For the past 3 years, the rental income from the HDB flat is enough to fully pay for the monthly mortgage of the condo. For me, this is an ideal arrangement. It is a good lifestyle for me and I hope it will not change.

  3. "They will suffer if there is a collapse in the rental market,"

    This is where it grates me. Isn't it plain common sense that I those who are "rich" enough to live in their condo and rent out HDB should be doing it the other way round instead? With 800,000 families/individuals doing just that, it only goes to show (1) the data that 85% of Singaporeans live in HDB public housing is just plain myth and falsehoods that they have been proudly touting to the world (2) there is such a large group of people who are mopping up the demand selfishly and thus constricting the supply to the real needy ones - be they young couples or singles.

    And in the meantime, those who are currently outside the ownership of home, we are the ones paying the price so that others can upkeep their inheritance!

    This country has gone to the dogs.

    1. the country is in the shit house

  4. A lot of mps and ministers also do that. Why not they come clean with it? They purposely do not want to match supply with demand so they can screw people lives. THis party has sold their souls to the devil. Vote opposition to slap them.

  5. A balance government is crucial, some of the advanced nations, with a few parties systems, with diversified talents, they are less problematic, with good standard of living, low inequalities & good social support systems etc.? The tendency to indirectly tax to pay their wages is virtually non existence?

  6. You see, Khaw and the PAP are helping 800,000 Singaporeans to create wealth just by renting out their flats. Very soon, all Singaporeans will not have to work at all, just collecting rising rentals from their HDB flats is enough for them to live on. So, what is the fuss about low productivity and all that nonsense. It is a non issue. So is unemployment. Who cares about unemployment when a job is just providing side income?

    The US Government is creating wealth by printing money from thin air. It is working wonderfully well, it seems. The Singapore Government, on the other hand, has found its secreat formula of creating wealth for Singaporeans by helping them to blow bubbles from properties, particularly HDB flats. No wonder the PAP is telling Singaporeans about 'more good years' and 'Swiss standard of living' and how good life will be in years to come. That is, if the property bubble does not burst!

  7. How many of these are PRs

  8. SO now our economy is shifting from a foreign investments base to a home grown SME, will it be easier for the SME to get all the supports, with less red tape? paper works, in getting the money and the training to upgrade the bosses and training the workers?

  9. Where dud that 800,000 households that needed the rental to get on in life comes from?

    I am certainly not one of them and can say empirically, no more than 10% of those I know staying in HDB flats do not.

    Either way, the "coverments" of ours sure dud a lousy job, if Singaporeans need to resort that kind of financing.

    To those who are paying their condo abs still hanging onto a supposingly public housing, susidised according to the "coverment", it is not right. Period.

  10. Sorry folks, they will not, repeat after me, "NOT SLAY THE GOLDEN-EGG LAYING GOOSE" - the banks survival is at stake, the property developers will need bailout, the CPF funds will have a meteor-size hole, it will be 1998 multiplied by 10 times! They are fighting hard trying to look tough on rising house prices but in reality, trying even harder to ensure the property bubble does not collapse like the US and Europe with similar consequences. But there are clues of problems - the fast action on the Sing dollar and Sing Govt Bonds yields add to serious symptoms seen in 1998 - the hot money brought by the rich and infamous (Severin where art thou) they cherish so much to beat HK is in first wave of exodus. Hot money will always "easy come easy go", when will wet-behind-ears MAS scholars learn? Ans: they never learn, because it's a new batch every 5 years, some were not even born in 1998 and Kojak was still struggling then to get rid of his criminal record! This 3rd generation of chiat liao bee leeders have ruined evrything since 2004.

  11. Sensible comments, but I am afraid the real devil is not in the details. The slide began, as usual with LKY`s obsession with control. He allowed the re-sale of HDB flats in the open market because he had reasoned that if you own real property you will not be inclined to give trouble or you will lose the roof over your heads which is of good value and can be converted to cash. Because the market was not properly managed and with the foreign hordes driving up the prices the HDB apartments have become the base upon which the rich`s private properties rest. The whole edifice has become too big to fail (to borrow a phrase from the financial sector). We are now trapped in this monstrous situation created by the PAP.

    1. The real sticking point is that almost all HDB flats are bought by Singaporeans with CPF savings and any collapse of the HDB market will amount to wiping out their CPF savings.

      Added to that problem is the upgrading mantra chanted by the PAP to enhance the value of HDB flats espoused by our talented leaders in their effort to win votes. It will be a meaningless call, amounting to lies, if the HDB value falls instead of being enhanced when the market collapse.

      So, you can understand the reason why the PAP relentlessly must prop up the property market at all cost, even to the extent of importing more people to push up the cost of accommodation.

  12. A while ago PAP minister all insisted that even with 1K salary it is possible to own a HDB flat. So why the hurry to make changes?? Too free?? Or the con was be exposed and their grapevines warning them of possible vote swing in coming GE 2016???

  13. It is not the government's job to look after the interest of landlords, particularly those who have a subsidised HDB flat and gearing up on another private one. The market mechanism will take care of matters and put things in the correct perspective if going by the government's free market mantra. The crux is that the government is in a fire fighting mode, unable to rein in their housing failures, unable to control the greater damage they have done.

  14. I anm a Singapre citizen and now live in Iskandar and have met lots of Malaysian PRs who own HDB flats in Singapore. They cleverly live in their bungalows here and rent out their hdb flats, drive red Singapore reg plate cars and collect a nice rental to pay for their bungalows. Khaw was a Malaysian . I cannot believe that they do not know that this blatant abuse is taking place??

  15. In other words, he is implying that HDB has been overcharging new buyers of BTO flats in excess of 30%. With so much obscene profit from sale of public flats, it makes one wonder why still need to ballot for a unit ?

    So recent owners of new HDB flats must be cursing our PAP Ministers for being overcharged by 30%. The previous one acted like the devil while this one tried to be the angel. Just wonder what role was the PM playing ? Both the devil & the angel ?

  16. Perhaps we can help the minister with some ideas how bring the prices of HDB down. They are not taught to think out of the box

    Make all COV illegal , why pay extra when the valuation is already #@^^&
    sky high and after all its a depreciating asset.

    Sane valuation fm the govt

    A 10 year owner occupied

    PRs are to sell the flats back to HDB ,this will end million dollar buyers

    All owners pay higher n higher tax for 2nd and 3rd properties, not a token tax like at present

    Let singles buy 3 room flats . Who knows what the future may bring. They may marry and have kids or their parents may want to stay with them. They cannot be sidelined as hopless cases. When they feel secured they take giant steps forward in their life

    Any more ideas?

  17. me????

    i only hope this fucking son of a gun will live his remaining ten years wheelchair bound!!!


  18. Govt job is not to babysit landlords and speculators

    Property developers and Banks are big boys and must bear responsibility for their decisions , big profits comes with big risks

    Whatever happen to good men who take pride in serving the ppl ,the country . the well being of world and do the right thing for the future generation to remember their name.

  19. another fucking wayang by pap and the malaysian borned cow...

    will they hurt the interests of the too big to fail banks .... without changing the existing tenure and conditions for new flats

    end of the day .... same shit under different packaging, maybe the new buyers will be worst off

    like the new guidelines for vehicles loans ... who will benefits? with marginal buyers forced out of the market ... with the "expected fall" in coe, who gain?