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Posts Tagged ‘Public Housing’

CPF: The cock that Swee Say talks

In CPF, Financial competency, Financial planning on 25/06/2014 at 4:43 am

The best way for Singaporeans to prepare for retirement is to use less of their Central Provident Fund (CPF) money when they are young. Mr Lim Swee Say, Minister in the Prime Minister’s Office, said this will ensure the current level of CPF payout can be maintained over time and not be eroded by inflation.

Mr Lim, who is also the labour chief, made that point when speaking to reporters on the sidelines of the closing of the Singapore Model Parliament yesterday. (23 Jan 2014). He later issued a clarification saying “that housing, healthcare and education for the children” were excluded from his spending comments, saying the constructive, nation-building media had misreported him.

Even with the clarification, he was talking rubbish, showing how clueless the nTUC minister was with the life of his ordinary members.

For starters, as TRE pointed out

Using less CPF money means leaving the money with CPF board, which in the case of OA, will earn only 2.5%. Inflation rate for the last few years already exceeded 2.5% (except last year, which barely covered the 2.4% inflation rate) [Link]:

  • 2010 – 2.8%
  • 2011 – 5.2%
  • 2012 – 4.6%
  • 2013 – 2.4%

Next after his clarification that he was talking of CPF spending other than for “housing, healthcare and education for the children”, one is left wondering if he doesn’t realise that other than for these things, CPF cannot be used for other than retirement. Is he so out of touch? Or another example of his special status, like once a month CPF statement?

The more impt issue, if no use CPF, how to afford “affordable” public housing? Public housing is only “affordable” because of 20-yr mortgages that use CPF monies to finance the loans.

At the moment 36% of a S’porean’s wages are locked up in the CPF because of this Hard Truth

[Without the CPF], Singaporeans would buy enormous quantities of clothes, shoes, furniture, television sets, radio, tape recorders, hi-fis, washing machines, motor cars. They would have no substantial or permanent asset to show for it.

  • Asian Wall Street Journal, Oct 21 1985 quoting one LKY.

Our money, but can only be spent on the “right” things: uniquely S’porean.

But it was an ang moh’s idea in the first place: In February 1940, one Keynes published How to Pay for the War. He advocated that interest rates should be kept low and that compulsory saving (thereby deferring pay) should be used as a mechanism to prevent the inflation that occurred during World War One. A portion of everyone’s income would be automatically invested in government bonds. Then, when the war was over, and the economy was in dire need of savings, the money would be released. The plan was too revolutionary for the British government.

In the S’pore version, the payout got deferred and deferred.

“The rule is, jam to-morrow and jam yesterday – but never jam to-day.”
“It must come sometimes to ‘jam to-day’,” Alice objected.
“No, it can’t,” said the Queen. “It’s jam every other day: to-day isn’t any other day, you know.”
“I don’t understand you,” said Alice. “It’s dreadfully confusing!”

(Through the Looking Glass and What Alice Found There)

Bring back Super Mah?

In Political governance, Property, Public Administration on 10/02/2014 at 4:52 am

If the PM brings back Mah, the minister who made sure HDB prices rose in a recession*, this Forum writer should be very, very happy about. HDB prices not falling. But to be fair to this idiot KS S’porean, P Ravi has empathy for the sentiments expressed.Still that doesn’t excuse his sense of entitlement.

Can Govt ensure HDB flats keep their value over time?

There have been recent reports on the falling prices of Housing Board resale flats (“First HDB resale price dip since 2005″, Jan 25; and “Resale flat prices not yet at ‘steady state’”; last Sunday)

The number of resale transactions has fallen considerably and we are seeing some negative cash-over-valuation deals.

Despite this, National Development Minister Khaw Boon Wan says a “steady state” has yet to be reached and that home buyers should welcome the softening prices of HDB resale flats.

A few years ago, I took part in several flat balloting exercises as a first-time buyer. I was not successful and had to pay a steep price for a resale flat.

Then National Development Minister Mah Bow Tan had said flat owners would benefit from rising prices because their homes would become more valuable.

There is certainly a need to ensure flat buyers are not disadvantaged by overly high prices.

But it is equally imperative that due consideration be given to flat owners, so they will not suffer a loss in the value of their homes over time. Are there measures to ensure this will not happen?

Chan Kwang Ping

P Ravi on Facebook commenting on the above, “People cannot be faulted for buying a flat even when the price is high and it is the sellers’ market, because whatever the market condition, people still need a house to live in. When people’s retirement fund are stuck in the house they own, such sentiments are understandable.”

What do you think?

And do you think he he will vote for WP? Maybe as WP has promised that it will only be PAP’s co-driver, a co-driver that will let PAP do as its like (OK! OK! WP says will slap PAP if it makes mistakes. But it only gets worked up when NEA, PA and PAP make trouble for WP: not when PAP makes trouble for S’poreans.). Will he vote RP or NSP? Err I don’t think he that stupid.

Will he vote SDP? I hope so (even if I think that its policy of crawling to the Indons doesn’t work), but doubt it as SDP wants to cut the link between investment for retirement and public housing.  A laudable, rational aim, but a tough sell when so many S’poreans are taking 25 yrs to pay off 99-yr HDB leases (About 87% of S’poreans live in HDB flata). Besides these leases have been a gd investment on paper (but useless as security), so far. Hmm maybe SDP should stress these flaws.

Khaw should say, “Vote PAP leh”.

Related posts:

http://atans1.wordpress.com/2011/11/19/hdb-oversupply-again-by-next-ge/

http://atans1.wordpress.com/2011/06/01/consequences-of-khaws-hdb-policies/

http://atans1.wordpress.com/2011/10/27/hdb-affordability-and-market-based-land-costs-redefined/

——-

*http://atans1.wordpress.com/2011/04/30/property-prices-going-against-natural-laws/

Why banks tested for 50% plunge in property prices and other wonderful tales

In Economy, Property on 16/01/2014 at 4:23 am

Singapore banks are so well-buffered that they will be able to withstand even a 50 per cent plunge in property prices here if this were to occur over the next two years, say stress tests done by the International Monetary Fund (IMF) and the Monetary Authority of Singapore (MAS). (BT late last yr)

I waz wondering when I read the above, why 50%?

Now I know: typical govt over-reaction:

BOTH public and private housing prices in Singapore have finally come down after a raft of government market curbs.

Prices in the once red-hot suburban private home market dropped in the fourth quarter of last year for the first time since 2009, new data yesterday showed. This dragged down overall private home prices.

Housing Board flat resale prices also tumbled in the October to December period, hard on the heels of a third-quarter decline.

This marked the first time public housing prices have slid for two straight quarters since 2005.

Consultants said weak demand for homes could mean that sellers will finally be at the mercy of home buyers this year, adding that a bumper crop of upcoming homes will swing things more heavily in favour of buyers.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={417120496-19741-7479931115}

Well if property prices ever fell 50%, the PAP govt would be overthrown overnight. And the co-driver kicked out with it. mad Doc and his RI doctors will be in charge Actually it would be the end of the world as we know it.

But maybe the govt isn’t over-reacting: http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/. Note that the article conveniently forgets that the banks have been stress-tested to survive even a 50% fall in property prices. Lots of other things wrong with the analysis that I’ll cover one of these days. But for now juz remember that one LKY was a regular contributor to Forbes. Taz the quality of their contributors? Oh, the central bank has come up with a rebuttal: read it in yesterday’s constructive, nation-building media.

Next tale: the cowboys were correct that the govt should restrict HDB sales to PRs:

The proportion of Permanent Residents (PRs) buying Housing and Development Board (HDB) resale flats has gone down in the last few months.

This comes after new rules to stabilise the HDB resale market were announced in August.

PRs now have to wait three years after obtaining their Singapore PR status before they are allowed to buy an HDB resale flat.

According to HDB, in the three months after the new rules were announced, PRs made up 12 per cent of all HDB resale transactions, with 528 units sold to them.

This is down eight percentage points from January to August, when PRs made up 20 per cent of all HDB resale transactions.

There were 2,581 resale flats sold during that period.

HDB also noted that the decrease is not unexpected, as there are now fewer PRs eligible to buy a resale flat.

It also pointed out the drop may not be solely due to the three-year waiting period. (CNA 23 december 2013).

Maybe PM should outsource policy decisions to the masses. Even IT operations are being done by the masses via crowdsourcing http://www.bbc.co.uk/news/business-25714443.

DBS doing NS on HDB loans?

In Corporate governance on 13/11/2013 at 4:26 am

If it’s one thing S’poreans who are paying off the mortgages on their HDB flats can agree on, it is that the govt is stretching the truth when it says that HDB mortgage payments are affordable because mortgagors can use CPF money leh. They are not that daft not to realise that it affects their old-age funds. And anyway, it’s always nice to pay less.

So it’s interesting that DBS has a very gd scheme for HDB borrowers. So gd that only the daft wouldn’t apply for it. I’ll let BT explain:

Thousands of HDB homeowners are turning to DBS Bank for a mortgage product that guarantees savings.

Those who took up a POSB HDB loan when it was launched in April could be looking at savings of as much as $1,600 by next month, calculations from DBS showed.

The first POSB HDB loan pilot launch – where homebuyers enjoyed a floating-rate loan with interest capped below the HDB concessionary rate for 10 years – was fully sold.

The bank is now into its second offering, which charges the same rate but for eight years, said Ms Lui.

The current POSB HDB loan charges for the first eight years the three-month Sibor (Singapore interbank offered rate) plus 1.38 per cent, capped at the CPF Ordinary Account rate. The current CPF Ordinary Account rate is 2.50 per cent.

Thereafter, the loan charges three-month Sibor plus 1.48 per cent. The September three-month Sibor is 0.374 per cent.

The HDB concessionary loan now charges 2.60 per cent, which consists of 0.10 per cent plus the CPF Ordinary Account rate of 2.50 per cent. Based on the three-month Sibor of 0.38 per cent, borrowers who switch from the HDB concessionary loan will pay a lower interest rate of 1.75 per cent.

For a homebuyer refinancing from the HDB in April, based on a loan of $400,000 and 25-year tenor, the potential savings over six months amount to $1,684.

And should interest rates rise over the next eight years, DBS guarantees that it will be capped at the CPF Ordinary Account rate of 2.50 per cent or 0.10 per cent below the HDB concessionary rate.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={563079109-19246-5011258124}

Nice to see DBS returning to its roots as “Development Bank of S’pore”., and using the POSB brand which some Foreign Trash CEO tried to get rid off. Fortunately, he went before the POSB brand went. Gd work ,New Citizen Gupta.

But if DBS is doing gd, is this mortgage making money, on a risk-adjusted basis, for DBS? How come OCBC and UOB don’t have similar schemes? Maybe DBS is helping out in constructive nation-building? Err what about shareholder value for non-controlling shareholders and gd corporate governance?

Never mind, I don’t own DBS shares.

To lose one Hard Truth may be regarded as a misfortune; to lose three in two months looks like carelessness

In Political governance on 09/09/2013 at 4:50 am

(“Mah & Yaacob disprove PAP’s Hard Truth on ministerial salaries”)

The implicit disowning of the Malay minister’s claims when he was Water minister that once-in-50-yrs floods were causing problems, not his ministry’s disfunctionality, has been implicitly disowned by the govt when the present Water minister said an expressway flood is unacceptable. Yaacob, talked of several floods that occurred several months apart as very exceptional events that could not be reasonably foreseen. VivianB’s comments imply that very heavy rain should be foreseen and planned for.

This reminded of another recent occasion when another Hard Truth was disowned.

On  26 August 2013, new rules were imposed by the Housing and Development Board (HDB). The one that caught the headlines and public attention was that households with permanent residency, or PR, status can only buy previously owned state-built homes if they have held PR status for at least three years. Permanent residents, who made up 10% of Singapore’s population of 5.3 million people in 2012, could previously buy a HDB flat from the resale market immediately after getting PR status.

But what S’poreans seemed to ignore was the rule change that would also offer public-housing loans with a reduced maximum tenure of 25 years, down from 30 years. Public-housing mortgage payments would be capped at 30% of borrowers’ gross monthly income, down from 35%. Prudent leh, we are told.

In 2011, one Mah Bow Tan argued that HDB flats were afforable because : It only took 30 years, 2 incomes and 30% of the 2 incomes to pay for the HDB flat.

As one blogger said qat the time: How many of you agree that this affordable formula is fair? This formula means that for the first 30 years of one’s working life, there could be very little saving for retirement. Most could only start to save after repaying their 30 year loan. So don’t ask why you don’t have enough savings for retirement. The other point which this formula dictates is that both husband and wife must be working to be able to afford the HDB flat. One income, forget it. And there are families that have to live on one income, by choice or by circumstances beyond their control, or by tragedies.

He went on: The people must denounce this formula as unaffordable. 30% of one income for 30 years is already too much. It was 20% of one income for 20 years for a 5 rm flat for a fresh graduate. But the goal posts have been shifted during the last decade that people have come to accept 2 incomes and 30 years as the norm. It is not, and it should not be the case.

Well the PAP govt has now dropped the 30-yr part of the formula. And by implication, condemned the man who said it. The PAP should also be asking itself, “Was it worth it to change to a GRC system, so that this clown chap could be made a minister? Maybe better if we never had him as a minister? Why did we let him remain a minister for so many yrs?”.

What next PAP? Ditch his point that selling HDB flats at cheapish prices was tantamount to raiding the reserves?

And while I’m at it, how come our ex-ministers can’t earn this kind of serious money? Players on the int’l stage in business deal-making

http://www.reuters.com/article/2012/09/10/us-glencore-blair-idUSBRE88915920120910

Instead they

http://atans1.wordpress.com/2011/10/07/sph-another-home-for-ex-ministers/

http://atans1.wordpress.com/2011/09/02/retired-ministers-no-megabucks-from-private-sector/

PAP listening to SDP?

In Infrastructure on 11/03/2013 at 6:22 am

Err didn’t the govt rubbish the SDP’s idea of lowering the cost of HDB flats by making it a condition of getting cheaper flats that they be resold to HDB?

And didn’t Khaw just say that this idea will be studied? But didn’t credit the SDP for suggesting it?

As an oldie using SingHealth, here’s hoping the SDP’s healthcare ideas be adopted* and that Paul A** gets co-opted to become Health minister.

——

*Never mind if it bankrupts S’pore as healthcare costs in the US and UK are bankrupting these nations, I’ll be dead.

**He was a possible SDP candidate for Punggol-East. Gd that he didn’t stand because he couldn’t claim to be born poor: even s/o JBJ claimed that although born in a pram made of gold, silver and ivory, he became poor when his dad took on the PAP. He dared make this claim even though he went to very expensive ang moh schools. JBJ became so poor that he could send his son to expensive schools? Come on, man who doesn’t know the Pledge, pull the other leg, it’s got bells on it.

 

Public housing: a brickbat, two cheers & constructive suggestions

In Environment, Political governance on 07/02/2013 at 6:25 am

As the population target “worse-case scenario” or “projection” of 6.9m as envisaged by the White Paper will require a lot more public housing, here are some constructive, nation-building ideas from me on how to avoid rabbit hatches, or battery-hen housing, in the sky. We can live like pigs in a modern-day Danish farm: comfortable, hygienic surroundings. Danish farmers believe that happy pigs produce the best bacon: something the PAP govt should take to heart, “Keep the exploited happy, and they will remain happy to be exploited”.

But first I want to analyse two “buah tahan” comments that irritate me.

Who comes out with the most stupid comment on the row on Executive Condos? No it’s not Khaw, surprising; but one Jaimie Chong, an EC penthouse owner. She thinks she  will still get permission to cover the “open” space: EC0001. Her agent says so. How dumb can this rich gal get?

And secondly, our dear leader said, ” If government did not get involved in housing, it would be like Hong Kong: overcrowded and subject to high prices …” Is it not surprising that the usual S’pore self-haters who populate the pages of TRE, TOC and Facebook didn’t challenge him on this?

He is telling us a Hard Truth (perhaps the only one) that is grounded in fact: in housing, the PAP govt does more for S’poreans, than the HK govt.

– “In 2012, HDB offered a record number of 34,237 new flats comprising 27,084 new flats under the Build-To-Order (BTO) system and 7,153 balance flats under the Sales of Balance Flats Exercise … HDB had earlier announced that at least 20,000 BTO flats are planned for 2013. HDB is finalising its building plans for 2013 and will now target to launch at least 23,000 BTO flats. These projects will have a good geographical spread in various towns/estates which compares with 75,000 completed over the past five years.” (HDB)

– Contrast this with what HK’s CEO said last month as reported by the BBC, “He promised action to address a property crunch that has seen some residents forced out of the property market and even into tiny so-called “cubicle homes”.

Land would be both re-zoned and reclaimed so it could be developed for housing, leading to a greater supply, he said. A target of 100,000 new public housing units would also be set for the five years from 2018.

“As long as the housing shortage persists, we have no alternative but to restrict external demand and curb speculative activities,” he said.”

The 20,000 a year HK programme starts in 2018.

But it’s only two cheers for PM, because by comparing our public housing programme to that of HK, he is forgetting that dad was a “social democrat” (dad said that in his books), not an ang moh lord or HK property tycoon: social democrats believe in raising living standards. So, of course, the govt had to get involved in public housing.

Now to the constructive, nation-building part on how make us as happy as Danish pigs, not as unhappy as battery hens.

Try this Dutch approach, Khaw? No not land reclamation. Architects in Holland are creating prototype neighbourhoods of sustainable floating houses. Their aim is to have new cities entirely out at sea as an alternative way of living. http://www.bbc.co.uk/news/world-europe-21180779. We got plenty of sea too, and the weather’s a lot nicer.

And best of all, we can retain the central catchment reserve, Ubin, the mangrove swamps (so beloved by mosquito-lovers) and the golf courses (that ministers and senior civil servants, and their private sector pals play on).

And floating towns will allow S’pore the possibility of experimenting with an alternative to 50-storey HDB coops flats. We could have hutong-style community housing (high density, low rise buildings) in the new sea towns. Plenty of room to expand sideways there. I read somewhere that London is experimenting along the lines of high density, low rise buildings . Can’t locate the link to story.

BTW, watch this 2011 BBC video clip on S’pore : Urban plan S’pore style http://www.bbc.co.uk/news/business-13852298. The architect who wants “more space” must be very upset with Khaw’s “worse-case scenario”.

HDB: Oversupply again by next GE?

In Property on 19/11/2011 at 6:40 am

The housing market in Singapore is heading for a prolonged downturn and overall private home prices are forecast to fall between 22 and 26%  in the next three years, Daiwa Research said. “We believe the residential property market could remain depressed for several years, triggered initially by a likely forthcoming gross domestic product slowdown (in 2012) and lingering global economic uncertainty.” (If you think this is bad, Barclays predicts a 45% decline in HK.)

Daiwa downgraded its view of Singapore’s property sector to “Negative” from “Neutral”, adding that “it is hard for us to see the developer shares outperforming the Straits Times Index over the next six months” despite their underperformance in the year to date.

From late next year, Daiwa said, structural issues such as the rapid build-up in unsold inventory in the primary market and vacant rental units will take centre stage and keep home prices and rents in check for several years. The mass-market segment will hold up slightly better than high-end properties, supported by better affordability and the resilience in the resale prices of HDB flats.

Err what happens if because of

– less FTS,

– slower economic growth or even a recession, and

– Khaw’s promise to build, build,

kiasu young S’poreans decide not to take up the HDB flats that are being built because they think prices will tank?

Remember that Mah overbuilt by more than 150,000 units in 2003, and was beaten up by the Opposition and netizens. For housing, the simple answer was the electorate demanded it, if you could recall the daily outcry in 2001 – 2003 by the opposition as well as members of publc on wastage of public funds on the more than 150,000 units left empty:  ajohor, a poster, on my blog pointed out recently.

(BTW can you blame him for then being super cautious and getting a reputation as the man who made public housing prices go up in a recession? No can win. But he got millions in the bank to console him, so no need to cry for him.)

Final tots. If there is an overhang of HDB flats, what will the Opposition and netizens then say? And how will the voters vote? For or against PAP? Hmm maybe PM deserves his global benchmark breaking salary? Salary review committee pls note.

Hong Kong to resume subsidising housing

In Hong Kong on 13/10/2011 at 5:07 pm

Hong Kong will resume a programme to subsidise home purchases to address public anger over ever rising property prices.

Donald Tsang, HK’s leader, said in his annual policy address that the government plans to provide more than 17,000 apartments between 2016 and 2020. On average about 5,000 apartments will be available each year. “Peanuts” by S’pore standards and remember there are lots more people in HK.

The programme is aimed at families who earn too much to qualify for public rental housing but who cannot afford to buy a home of their own.

The flats are to be priced at the equivalent of S$250,000 – S$330,000 and available to those earning a monthly salary of the equivalent of S$3,300 and S$5,000. These apartments will be between 400 to 500 square feet in size.

More background from BBC Online.

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