6/28/2009

Proud owners of a $3m dollar piece of space

How many of you are proud owners of a $3m or $1m piece of space in the sky, with 4 walls that you called home? I bet there are many out there, some willingly forking our several millions to have a little space fancifully dressed up and called high end apartments. High end or low end, it is a big chunk of money that people are paying for. Imagine how many more things they can do with that kind of money to better their lives and the lives of other people? But relatively speaking, the money they spent is only a fraction of their worth. They still have a lot to spare to live a great life. At the lower level, at the HDB level, many are paying a relatively higher portion of their income for that space called flat or home. Why do we have to pay so much just for a place to sleep? The joke now is that the people who really enjoy the expensive flats or landed properties are the maids. They are the ones staying home while the owners slogged day and night to pay for the flat or houses. For many who just have one property to live in, a 4 rm or 5 rm flat is still a flat whether you pay $200k or $1m for it. High prices are good for those who want to trade their homes. And if the cost of a flat can be reduced, the savings can be used for a better quality of life, to purchase many other things. What is happening is that the money is now locked in this little flat called home. It is a deplorable allocation of resources. Asset rich and cash poor, and little money left for other things. Is this a good model?

23 comments:

Wally Buffet said...

Everyone can't have a waterfront property like those in Australia so here, the higher you go up, the more valuable your abode is.

That's why 1 room rental flats are never higher than 10 storeys.

To tell someone you have arrived, a bungalow bought for $20 million is nothing compared to the Penthouse suite at The Sail.

Think about it. Isn't it brilliant that your flats which are leasehold sits on pillars which in turn are driven into land owned by the state?

Anonymous said...

I had a wonderfully hard working employer years ago who told us to visit his home as he had renovated it at a cost of a million dollars.

My boss worked longer hours than any of his employees and some employees envied his(boss) maids(foreign) and dogs. They(maids n dogs) lived and are living in the bungalow while their bosses/owners only go home to clean-up themselves, eat, sleep and out to work at sunrise.

Well, my bosses(owners of the companies) are very hardworking, enjoy working and are happy working.

patriot

Anonymous said...

That's life and a barometer of your success. What better way to advertise your worth than a $3m pad? Or a million dollar car?

Talking about success and worth reminds me of Michael Jackson and his million dollar shopping sprees. That's his way of projecting his lavish lifestyle. But who cares? He was still a lonely man. Unsatisfied with his self and his worth.

We came into this world empty-handed. Some may inherit or make fortunes along the way. But we all end up the same way as we came, empty-handed.

Envy not.

Lost Citizen

Wally Buffet said...

"But we all end up the same way as we came, empty-handed."

That may be so but for some, the journey is as pleasant as money can make it. For others, they wished they didn't start the journey in the first place. :=)

Anonymous said...

'...but for some, the journey can be as pleasant as money can make it'

That is probably for the minority, but the majority will equate a pleasant journey with lots of money and material things to boot.

Lost Citizen

redbean said...

my point is that if we have not push up prices of housing and cars to high, the money can be diverted to better use. it is a total waste for those who just need a roof over their heads.

Anonymous said...

Housings, cars, liquors, tobacco are items that generate much revenues for the State. The roof over one's head is the most essential item and together with cars, they represent the status symbol of success. so, making money from them would be the most clever in the business sense.

All the money made from essential goods and services and those from hight tax(excise) items can then be used for national developments which will then benefit all the people, right ?

kopi soh

Wally Buffet said...

High prices for HDB is good.

When you sell your apartments for half a mil, you can emigrate to Australia and buy a farm.

Unfortunately, my three room albeit in a prime area can only fetch about a quarter mil so can only buy a small farm.

Big farm, small farm, still a farm. Can rear chickens, rear some sheep and cows, fish. For information, the fish in Australia is so plentiful that no baits are needed. Just throw the line with lots of hooks into the water, wriggle a bit and you will have strings of selar size fish for dinner. The pipe dream of all those sorry asses dangling their rods forlornly at the Bedok Jetty.

Matilah_Singapura said...

> Everyone can't have a waterfront property like those in Australia so here, <

Haha Wally. Let it be known that most people here in Aus don't live on the waterfronts. Many of those properties are no longer in the hundred thousands. Try 10 mil upwards :)

redbean:

> at the HDB level, many are paying a relatively higher portion of their income for that space called flat or home. Why do we have to pay so much just for a place to sleep? <

Simple answer: govt controlled market. Frankly you get better "value" on a $3mil privately owned home. As an HDB'er you're just paying rent.

But Wally is right — you can sell your HDB and emigrate to Aust, but property prices are fast catching up, although you can still get slightly better "value".

A 1000sq ft HDB is approx what... 500, 700k? You'll get (after currency conversion at 1.15) perhaps 1200-1400sq ft — maybe a room an a garage more. That's all.

Gone are the days where you could sell up your point block for 600k and buy 5 properties here. Gone.

redbean said...

my point is simply this, we are wasting too much time on this thing called property. it is ridiculous to put so much money aside just for a place to sleep, be it 99 year lease or 999 year.

the money can be put to better use.

Matilah_Singapura said...

You have to pay to live.

So far, no one has been able to do otherwise. If you want cheap houses, move to a country where land-space is not a premium or priced because of the inherent scarcity, like it is in S'pore.

Wally Buffet said...

"You have to pay to live."

This truism is the sanest thing I've heard so far.

No choice but to pay as Singapore is land scarce and the population keeps increasing. The important thing is that you will never ever make a loss on an HDB property. I have had two bites of the cherry. The profit from the first bite enabled me to fully paid the current 3 room so I am not complaining.

Wally Buffet said...

Hey Matilah, where about in Australia are you staying mate?

Last I checked, you can still buy a decent freehold property in Perth with a double garage for about A$350K although the house will now be further away from Perth central. For the same amount of money, you can only get a five room pigeon hole and that in a not too favoured new town. My friend just bought a waterfront detached bungalow in Perth for $1.3 mil Aussie. Is that still possible?

redbean said...

hi wally,

you have accepted the assumption that we are land scarced so our property prices must be high. this is not necessarily true. there are policies that can prevent prices from shooting to the sky. we don't need to bring in so many new citizens and PRs to buy up all our land and properties. our public housing is a govt monopoly.

there are many things that can be done to lower to limit the high prices of public housing, just like medical cost and many other costs. it is a managed economy and we can managed the way we want it.

Wally Buffet said...

Hi Redbean,

I think the Govt., in their drive for a free market economy, does not want to interfere too much with the supply and demand mechanism. In the end, public housing, to the stage where we have now progress to is almost like any other resource. Like I said, if you paid high, you sell high. In fact, I treat the HDB and the CPF as one entity. Transferring money to the HDB via monthly installments is almost the same as leaving it in the CPF. Doesn't sound very logical huh? I thought so myself too! :-)

Anonymous said...

Friends;

WE ARE NOT LAND SCARCE !

Singapore should have wisely uphold the 'two(child) is enough policy. That would have allowed us a much more relaxing lifestyle.

NOW, the STUPID IDEA to bring in more Foreigners is THE CAUSE OF SPACE(land) SHORTAGES. It is not just land shortage that is the problem now, it is the increasing social and political problems that challenging !

patriot

redbean said...

the two most dangerous economies are the command economy and the free enterprise. both, done in extreme will lead to disaster.

a wise govt shall adopt a mixed economy and exploit the advantageous of both to benefit the people. however, exploiting the benefits of both systems can be for the benefit others other than for the people. that is equally bad.

public policies, public administration can be for the people or not for the people.

you are lucky, and many are in the same boat as you, having one or two bites of the cherry and benefitting from it.

ask those who have yet to take a bite of the cherry, the young coming into the market.

Matilah_Singapura said...

Wally:

Property is an "imperfect" market. Have a look.

http://www.realestate.com.au/

I move around — WA mainly. It's one big state! But Perth is where family lives.

redbean:

On a mixed economy — it is bound to fail catastrophically. UNLIMITED Free enterprise — where the capital structures are left to the market, and the price/profit-loss mechanism is left alone, is the only sustainable way. Any tinkering distorts the "information" system, leading to errors in judgment.

You are free to disagree with me. Most of my ideas are from Hayek and von Mises anyway, and Hayek — who was Mises's student — is a Nobel Prize winner. But if you can make a good case, then you might qualify for a Nobel Prize, and kick Hayek's ass!

Anonymous said...

The Govt knows little red dot is land scarce, so that is one of the reasons they are making hay while the sun shines. Keep on pushing the limits on HDB prices and you will still see Singaporeans snapping them up. If Singaporeans do not, foreigners (PRs) will, so they will tell you.

As for the question of why and how they can simply do that is simple. We voted them in, we have to live with it.

They can say all they want about letting free market decide what you pay for housing, but the simple truth is the Government is manipulating the property market, pure and simple.

Does the Government care about what other use you can put your money into? Nah! Most important to them is that you keep all your hard-earned money with them, whether as purchasers of HDB flats or CPF account holders

Lost Citizen

Anonymous said...

Greed and glory seeking are the SINs that will bring the Downfall.

It is just a matter of time.

And it would not take very long.

patriot

Matilah_Singapura said...

patriot,

I think if the argument doesn't evolve much past biblical judgements — i.e. good vs evil, greed vs selfishness, ego vs selflessness, absolute-morality-rubbish etc — IMO it will be the lack of objective and reality-based (as opposed to supernatural-celestial judgment) thinking which will cause the failure of S'porean civilization.

Anonymous said...

Hi Matilah:

Being atheist, supernatural causes and effects are not in my mind although one reaps what one sows is definitely acceptable to me.

It is the culminations of misdeed and human fallacy that are culpable. Human weakness accounted for most downfall of empires.

Your exposition is as valid.

patriot

Matilah_Singapura said...

IMO there is only one human weakness: bad thinking. Whatever we do or believe or interact with our environment or with others is solely directed by what goes on in our minds. And the mind is what the brain does — there are no souls, spirits, ghosts or any "supernatural" forces at work.

It all occurs in the densely packed space between the ears of all human beings. And the basic nature of a human is to think — either correctly or incorrectly.