8/14/2008

Surest sign of decline

The boom years of the 70s and 80s are over. Those were the real golden years when everyone is upgrading and improving their lives. Today the decline has set in. There is still great growth to the very rich. These are the people that are living it off and having the best of everything. These are the people, the same few people, that are buying up the high end properties, their 6th or 10th properties, maybe 20th. The affluence is confined to a smaller and smaller circle. Compare to the 70s and 80s, there was a general uplifting of the standard of living of the majority of Singaporeans. The people were moving from rented flats to 3rm flats, 3 rm to 4rm, to 5 rm and to private properties. Everyone is looking to move to a bigger flat or a private property every few years. What is happening today? Dr Beng Teck Liang, a member of the PAP's Policy forum council found out that 'When it comes to money woes, the hardest hit are those living in 4 rm HDB flats.' They are not able to pay their utilities bills and would be better off to downgrade to 3 rm flats. They simply cannot afford to live in 4 rm flats. Huh? What's happening about more good years? And this is the biggest group of people in trouble. Mah Bow Tan is even considering mean testing for HDB flat applicants to make sure they can afford to buy 4 rm flats. How come 4 rm flat is now beyond the reach of so many Singaporeans? Why are they so unaffordable when our economy is growing by leaps and bounds and our country is getting richer and richer? Are we saying that our people are getting poorer and poorer or because everything is getting more expensive? On the other hand we are hearing that Singapore is populated by jet setters and trend setters and their lifestyles revolve around Formula One car racing. It is more likely that paradise and hell are existing side by side.

9 comments:

Anonymous said...

Nostalgic are we! Caution, take a yellow flag, or crash and missed the checkered flag.

redbean said...

not so much as nostalgia. those were the days when everyone was confident of a better tomorrow. and you could see and feel it. when anyone sold his flat or moved out, it was to a better place. 5rm, executive flats, HUDC, private condos, private properties.

can't believe that so many people are struggling to hang on to their 4 rm flats and many are talking of down grading. and our incomes have grown. we are richer, bigger take home pay.

what an illusion of well being.

Anonymous said...

It is the same with every country. You come up, you reach your potential and you stagnate. Others will have their turn. Better that we realise the reality early.

Anonymous said...

if you believe the downgrading from execs, 5rooms, 4rooms to 3rooms is going to happen soon, you should take your position before retrenchments start.

redbean said...

at the rate the prices of flats are going up, and the stagnation of salaries, the system is unsustainable.

when 4 rm flat was $20k, household income was $1.5k.

now 4rm is $300k to $400k and household income is $2.5k to $4k. the ratio will tell you that it is unaffordable.

Anonymous said...

if the value of our flats are purposely depressed, foreigners turned PR will snap them up on the cheap. the gap between the rich and poor will then widen further.

if the value of flats are allowed to appreciate, the assets of 85% singaporeans will move up and everyone, saved for a small vocal minority will be happy participants instead of disgrunted observers in the new economy of our country. just my 2 cts tots...

Anonymous said...

It makes no difference whether property value is going up or down because you still need a place to stay. It only matters when you sell it. What happens when 99 years lease is up? Will your property be worthless overnight?

redbean said...

asset inflation is only good for those who are speculating in properties or waiting to cash out. for those who are living in them, a 4 rm flat is a 4 rm flat, never mind it is $50k or $500k.

the price of property for those who just want to live in it, should not be beyond his means/income. a young couple with a combined income of $5k pm will have a hard time servicing a loan of $300k for a 4 rm hdb flat. this will work out to $600k over a 20 year loan or $30k a year. this eats a big sum into their disposable income.

but more important, the impact of high property prices affects a lot of things. the income must be there to support this big leak. once the income is not there, the millstone will snap the neck it is hanging on.

we have gone too far down this road of inflated property prices and it is very difficult to unwind. if greed has not got into this property price policy, our flats could still be half its price or less, and we need not inflate the people's income to pay for it, and our general cost of living will be much lower.

we are pricing our labour out of the international system. if people can pay a chinese or indian worker less and get the same thing done, there is no need to pay a singaporean 5 or 10 times the amount for it.

the americans and europeans are seeing a hollowing of their employment market and our turn will come. the salary of our workers cannot go up without real productivity. how can we led property prices and basic necessities run away?

Anonymous said...

asset inflation is only good for those who are speculating in properties or waiting to cash out. for those who are living in them, a 4 rm flat is a 4 rm flat, never mind it is $50k or $500k.


wah, the flat is your property and asset, you really dun mind it is worth $1 or $500,00?


the price of property for those who just want to live in it, should not be beyond his means/income.


do you think this is communist controlled economy or what?



a young couple with a combined income of $5k pm will have a hard time servicing a loan of $300k for a 4 rm hdb flat. this will work out to $600k over a 20 year loan or $30k a year. this eats a big sum into their disposable income.


so how? better give free lah.