Panic button or election fodder?

Not too long ago, the developers were trying to sell the line that 1000 psf properties are cheap and could even go higher. They knew their sums. More foreigners, limited land and limited supply, sure property prices must go up. Then some quarters were extolling the great virtues of our housing programme and how lucky we are compare to the mickey mouse flats and shoe boxes for rats in Hongkong, and selling at 3 times our prices. The message is that housing prices will keep going up and the sizes of flats will shrink. That is the future of Singaporeans. And there were quarters telling the people that public housing prices are affordable and good value for money. And supply is not a problem. Then a few days back, Chok Tong and then Mah Bow Tan came out to assure the people not to panic, don't rush in to buy, the govt will provide more affordable housing by putting up more land for bidding. It is like going to the toilet and the flats will be out in a few minutes. The MAS chipped in yesterday to warn of more measures to curb speculation if necessary. This is turning into something quite serious. Is all these panicky measures necessary? Looking from the positive side, Singapore has more than 800,000 units of public housing alone. If the govt could relax the sub letting rule and let all public flat owners to sublet their flats to foreigners, all Singaporeans could be instantly turn into landlords. In such a scenario, there is no need to build more flats. In fact the flat owners will be begging the govt not to build more flats. Squeeze the supply so that their flats can be worth $1m or $2m. Then they have the options to sell them or sub let them at higher prices. And all Singaporeans need not work anymore, just live on the income of their rentals. We will become a land of landlords. And we can increase the population to 8m and the people will be asking for more to increase the demand for rental flats. Foreigners will all be welcome. No need any campaign to be nice to foreigers anymore. All the flat owners will live happily with the foreigners as their tenants. And we will be number One again in integrating foreigners with our citizens and they all live happily together, under one roof. Won't that be nice?


Matilah_Singapura said...

i can almost see the strategy emerging. To get the attention of people for political aggrandizement, you have to make "an issue" and housing is a deeply emotional issue because it represents the anchor, the "basic security" of individuals: their home.

Now, many folks are clearly worried because the bubble-prices have inflated real estate values. As these people suffer however, those who are already "in the money" are quietly smiling.

HDB-CPF is heavily politicised, and therefore just like many elections in the past, I think it will be used as a political lever once again.

The next step is to inculcate emotional states based on F U D — Fear Uncertainty Doubt.

If you are using more stick than carrot to "market" an idea, this is the mechanism you use: fear, uncertainty and doubt. If used craftily, you will violently shake up and unsettle the emotional state of your "prey".

Many people have also been conditioned to believe that to prevent the ultimate disaster, there is some kind of super-being who will SAVE THEM.

This is where the smart political player comes in and seizes the opportunity, leveraging the moment to create new opportunities and to establish a power base, or strengthen one already secured.

Thus when emotions are being tossed around in chaos, out of the chaos emerges a MESSIAH who will SAVE the weak and helpless.

Works everytime.

The People Get The Government They Deserve

Anonymous said...

Hi there Redbean,

S'pore is already the HDB land of landlords. Go look thru all HDB rental ppty websites and you will notice most (8 in 10) are illegal or against HDB policy of subletting.

It's damn good business with return on investment greater than 4% (> than rate for CPF Special acctt) for most resale buyers. For 1st time owner of flat, the return is even more lucrative. Do the maths.

In financial terms, this is known as arbitrage. They rent out their flats at greater than 4% and buy private properties financed at less than 2%. They still earn more than 2% implicitly.

Quite a few are rented out to a master PR tenant, who then sublets rooms he does not need to other fellow PRs.

For 'legal' HDB rental, do you beleive that everybody complies with the 'lock-up 1 bedroom' policy? The ground shouts a resounding NO.

Where is HDB in all this? Eyes wide shut!!

Facts from HDB:
No of hseholds HDB took action against for illegal subletting
2007 - 62
2008 - 28
2009 - 17 (up to Aug)

Do you believe the low numbers? They dun bother prosecuting.

Now you know why prices HDB resale flats is high.

One way to curb high ppty price is also to prosecute those offenders seriously.

From another perspective, it's also about enforcing the law fairly.

I am a HDB flat rental and I speak from personal experience. I always wonder why illegal HDB flat renting is so rampant but why enforcement of littering/smoking is pursued religiously.

Anonymous said...

Very soon Singaporean will be strangers in their own block just like being stangers in your own country.

Matilah_Singapura said...

anon 1156

> One way to curb high ppty price is also to prosecute those offenders seriously. <

I doubt that will work, because you can see the silliness the govt generates: the govt passes rules which restrict supply on the market (lock up one room + all sorts of nonsense laws), which causes more desperation from potential renters — they bid up the rental price competing with each other in order to secure accommodation.

The govt caused this "failure" now they have another gambit to pursue and prosecute those who break untenable rules in the first place, further restricting supply and thus causing more kiasu behaviour... which restricts supply and imposes barriers to market entry.... which in turn drives UP the rental cost even further.

It is a mess, due to the design of the system. The best way is to leave it alone and allow renters and landlords to simply act according to their own individual relationships.

Anonymous said...

For the sake of the lower income heartlanders in Singapore, please do not rock the boat so hard in your criticism.

Francis Chua

Anonymous said...

Dear Mr Redbean,

For the sake of the lower income hardlanders and heartlanders, please rock the boat so much until those lazing in the control room wake up their bloody ideas from drinking too much unhealthy alcohol and got so much addicted that they have become so numb and insensitive to the cries of the all others in the same boat that they have forgotten their responsibility to steer the boat to the right direction.

Have a nice day.

Green Peas.

redbean said...

hi guys, what we are doing here is merely kopitiam talk. no one will take us seriously.

francis, no need to over react: )