Tuesday, December 3, 2013

End Of The Dream

Three months ago, a colleague had to downgrade from his pride-of-joy condominium possession to a humbler HDB abode. After a life time of work, he was back where most Singaporeans started off with, a pigeon hole in the sky. The story is familiar, he had to finance his son's overseas education, the limited places in the local university are still being parcelled out to foreigners, some on gratis basis.

He sold at his asking price. The surprise was when he bought without having to shell out for cash over valuation (COV). The eager seller even allowed a further discount. Turns out chap had committed on a town house, and was in hurry for available cash. One man's folly is another man's fortune.

The mainstream media has confirmed the trend. Average application rate for BTO flats has declined from 5.3 in 2010 to 2.9 this year. BTO application rate for second timers was 2.4, way down from 25.9 in November 2011. Well done, Mr Khaw, who wrote, "We have cleared the backlog young families buying their first flats." Why then, is the Minister for National Development planning to slow down the supply of flats from next year?

Earlier in June, Khaw cited excuses claiming the increase of supply was "not sustainable", and it could slow down after 2015 to prevent a glut in the market. And they still maintain a 6.9 million population is "sustainable", with all the invasive glut from the foreign crowd. Plus, the Senior Fellow at the Singapore Institute of International Affairs and Adjunct Professor at the Lee Kuan Yew School of Public Policy even suggested Singapore can fit 8 million people. Whatever Dr Parag Khanna is smoking, has to be good hash.

This has to be a re-hash of the asset enhancement Kool-Aid dispensation. This is how the old man still sees it:
"But Singaporeans have also made great gains from their properties. If they believe property is overpriced and that prices will eventually go down, the option of cashing out is available to them. You can sell your house, rent in the interim and wait for prices to fall. If you believe prices are going to stay up, then you hold on to it. It is ultimately a question of confidence in a particular country or in the political system that is is run on."
("One Man's View", circa 2013, page 271)

That's easy to say for someone with a bungalow (or two), couple of condominium units bought at special discount from friends in property development, and millions in the bank to spare. The average lesser mortal has only options to move down, and in extreme cases, to the tent city at Changi beach or the void deck. BTW, that colleague is hoping his son will graduate, get a job, secure a Green Card, and hopefully ship the whole family over. Now that's "confidence in a particular country".


  1. In a new piece for Project Syndicate, Nouriel Roubini who predicted the 2008 crash identifies at least 17 housing bubbles:

    Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.

    Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates. Given anemic GDP growth, high unemployment, and low inflation, the wall of liquidity generated by conventional and unconventional monetary easing is driving up asset prices, starting with home prices.


  2. Fake Chan Chun Sing12/03/2013 11:17 AM

    Personally, I won't be happy until there are people sleeping in the streets, dying of hunger and out of their schools, jobs and homes. Then I will draw a poverty line. Until then, our multi-tiered kueh lapis works for the 6.9m population, 8 million even possible!

  3. Oh! I have been waiting with my mouth open since 2009... when there should have been world war 3, protestors burning buildings, stock markets crashed to 100points and currencies to hell bank note values.

    And still in hope whenever I hear news of "risks" in the markets from stocks & bonds, housing, entire economies.
    NOL still floating, SQ still flying, CPF still making profits, Far East making profits, Civil servants getting bonuses, ...

    ... even the phillipines economy is unaffected by typhoon.

    If all this is untrue, then I must say I am impressed with how news, bloggers, are all coordinated in saying the same thing:

    We are not in recession

  4. Who is the idiot who started this asset enhancement scheme? He ought to be drawn and quartered. He is the guy who believed that productivity means making more popiahs as you gain more experience and you see his smug picture everywhere you go in Marine Parade.

    1. Goh Chok Tong's asset enhancement scheme is a disaster. Many lost of their cpf savings in stock and share investments. All for what ? Just to meet Goh Chok Tong's desire to see Singapore as a top share owning nation. Asset enhancement also resulted in active government efforts to boost property prices.

  5. Has anyone given any thought in the event of some kind of food or portable drinking water shortages..

    What the 8 million ppl (sans pap and cronies the first to fly out) gonna do...eat each other...and also drink each other blood?

    Nuts right..


    1. Its potable

    2. MIW and cronies have another escape route- submarines!! That's the reason I can think of for buying them. What do you think?

  6. KBW spoke as though under build of HDB in the past is not their problem. It is created, perhaps, by aliens.

  7. At least your friend has a son/children to bank on getting him out of the shit hole. The singles among us have been talking about moving to KL, Bali, Vietnam or Thailand for our cheap first and main home retirement. We will only keep a time-share small hotel room whenever we check in to Hotel SG Inc for our city & family catch up.

    People will be in for a shock when they realize the core has become a whore and sore place.

  8. Basically they are manipulating the supply so that the fall in prices will not reach a state of no return which will result it them losing more seats to the opposition at the next GE.

    As it is, they now realised they lost Aljunied because so many asset rich cash poor residents in Serangoon are not happy with PAP. That is why they don't want to define the poverty line so that these group of rich poor voters can be given some kind of monetary assistance in kind, otherwise more of these voters will say PAP can go to hell as far as their votes are concerned.

    Suddenly trade fairs in Hougang now need the approval the local shopkeepers. How come there are so many trade fairs all over the other constituencies and there are no complaints ? It's the vote that counts where these idiots are concerned. Talk cock about helping the poor is only an excuse.

    1. Yes, it is votes that matters most.

      and that is where it hurts most... best survey of all... everybody have their say, not some half past six survey on facebook, reach and ST.

      I await eagerly to register my say.

  9. Yes we are in a dream, like a futuristic nightmare. Everything here is now so surreal. Like the humongous ministers' salaries, the maddening crowds, the skyrocketing housing prices, the mad schemes of the regime, the expanding concrete jungle, the sight of ragtag elderlies rummaging for scraps and cleaning tables, the PWP and now the P. KaNiNa lunatic 8 million population, the widening wealth gap and GINI coefficient, and so on. To end this dream, everybody needs to wake up, and VTO in 2016.

  10. The elites are caught between the fear of mass revolt and their Ponzi scheme to continue to enrich themselves *many own streets of condos and more than "a few" GFCs, not to mention grass cutting companies, construction suppliers etc, just ask EMC) via the real estate and construction bubble. For now at least, as long as there is free flow of bank loans underwritten by unca sam and the feckless nippons' printing press, they can hide the asset bubbles through such bombastic terms like "global city" and "GDP growth". Its a mirage of course, all this influx of foreigners, the URA series of 20 year plans to fuel even more construction (and ponding and dengue originating from construction sites) paid by taxpayers money. It is exactly as their teachers taught them in Oxbridge's and Ivy league MBA schools - dig a hole, patch it up and repeat and voila, you have GDP growth; allow free influx of printed money - asset prices surge, and the decades-old UK politicians' doggy trick - massive immigration to fake "demand" when the locals are all tapped out, squeezed dry as retail sales keep plunging. Parag (who the f is this bump btw?) is like all the other mercenaries, para-dropped in to sugar coat the "next great leap forward of population influx". believe you me, 8m will come, it must come because we are a few years from 7m. After that, how to fake GDP? How to keep house prices up? For all we know, unca sam would have imploded in the next 2 years from the money printing, so 8m will definitely come. The writing is on the wall, it is already in back and white on the official propaganda media called ST. The URA plans rollout was the prelude, this is how they always spread the "good news".

    1. But, but, but.. it works leh!.. its not an illusion!.. there is really millions of dollars in their bank accounts!

      The GDP numbers also real leh!..
      The crowded trains is real leh!
      The condo & HDB homes really expensive leh!

      It works! say what u want but there is money everywhere.... except my pocket.

  11. MIW in addition to cronies include a different avoid route- submarines!! That's why I'm able to think of for getting these individuals. What exactly do you think?
    sky vue condo

  12. The USA grants green cards for a limited period of time before kicking you out...