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S’pore: Lessons for the West’s housing crisis

In Property, Public Administration on 29/01/2020 at 3:09 pm

The Economist has a report on the West’s housing crisis

one of the rich world’s most serious and longest-running economic failures.

S’pore is praised four times (No other city or country is praised that much):

More than nine in ten Singaporeans are homeowners, a higher rate than in any other rich country. And what a nice place it is to live. The city-state is rich, stable and has virtually no crime. The streets are clean.

Singapore seems to confirm what conservatives have long believed: that home ownership makes for richer, happier folk. Lee Kuan Yew, its first prime minister, was a big fan, arguing that it gave ordinary people “a stake in the country and its future”. Margaret Thatcher’s “right-to-buy” programme in the 1980s, allowing Britons in social housing to buy their property at knock-down prices, is said to have been influenced by the Singapore model.

https://www.economist.com/special-report/2020/01/16/home-ownership-is-in-decline

And

Boosting the construction of public housing is also welcome. Singapore, where 80% of residents live in government-built flats, is in some respects the model to copy. The state regularly renovates the buildings and, more controversially, promotes mixing of different sorts of people, to help prevent the emergence of ghettos.

https://www.economist.com/special-report/2020/01/16/what-is-the-future-of-the-rich-worlds-housing-markets

And

Many of those activists argue that overtight land regulation is the root cause of high house prices. To get a sense of the argument, compare Singapore with Hong Kong. Singapore has a fairly elastic planning system. The government owns most of the land. When house-price growth is too strong or the population is rising quickly, the state can release extra land faster than a barman at the Raffles hotel can mix a Singapore sling. In Hong Kong, by contrast, the supply of developable land is controlled by a small clique of oligarchs. What will buy you a cramped bedsit in Hong Kong will buy you a decent-sized pad in Singapore.

https://www.economist.com/special-report/2020/01/16/politicians-are-finally-doing-something-about-housing-shortages

And

Autocratic planning systems do a better job of boosting housing supply. Russia has raised its annual rate of housebuilding from 400,000 a year in the early 2000s to over 1m. Singaporeans who protest against development are routinely ignored, says one with a house located near Tengah forest, some of which will soon be razed to make way for apartment blocks.

https://www.economist.com/special-report/2020/01/16/politicians-are-finally-doing-something-about-housing-shortages

Vote wisely.

60% of S’poreans always do: Why Oppo cock to think that HDB issues will affect the vote

(Last para added on 30 January 2020, at 4.10am)

 

 

  1. HDB and private condos are two markets, like SGX used to have “foreign” and “local” shares: they were exactly the same shares, have the same voting power, pay the same dividends, backed by the same amount of assets, but people in the two markets have different psychologies; the belief that someone would pay more for the foreign shares is sufficient to make foreign shares more expensive

    In the same way, HDB real estate prices need not be tied to private real estate; condo rental prices determine their capital values, and rents were determined by expatriate housing allowances (which were determined by previous rentals as well as current economy), HDB prices are largely determined by how gov price newly built units; HDB and private condo prices ought to be less connected than local/foreign shares

    they got tied because of certain decisions that started in 1984 election campaign, when LKY got annoyed with opposition propaganda that u do not own ur HDB flats because they r on 99 year leases He announced at one rally “HDB will stop building in opposition districts”;

    at the time I actually did not understand why that should cause anyone to worry; but the Northeast MRT line provided part of the explanation – no population increase, no new infrastructure; the Mathias Yao–Chee Soon Juan Straits Times Forum series of letters provided some more – poor infrastructure, lower HDB value;

    with HDB apartments traded on the open market (previous owners are allowed to go back and buy a new apartment from HDB after 5 years, but must sell the existing property first) Soon Permanent Residents, who are not entitled to buy from HDB, buying on the open market caused the HDB asset values to rise; some singaporeans followed, to avoid long waiting time buying new one from HDB; people began to get used to the idea of capital gains, and HDB sold new ones at higher prices to ensure no one gets too used to excessive profits

    if u r paying off a 30year mortgage, basically for all ur working life to own an HDB flat, there is more 30 years of history behind it

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