Am I disappointed with SDP’s NOM?

The main thrust in SDP’s housing proposal is the Non Open Market Scheme, ie buying flats from HDB and must sell back to HDB. I think this is like reinventing the wheel and trying to look clever. No need to.

Look, the problems and unhappiness are caused by the current housing policies. 1. Not building enough to meet the demands of Singaporeans. 2. Selling HDB flats to PRs, in the resale market. This is a very dangerous thing to do if the PR population is not curtailed. In the future, many public flats would end up being owned by PRs. 3. Selling HDB flats at ‘airy fairy’ market subsidy price. Stop this scam and go back to cost plus pricing.

Just address these problems. There is no need to reinvent the wheel to come up with more ‘airy fairy’ schemes if the fundamentals of public housing are put right, ie building flats to ensure all Singaporeans can buy them at cost plus and shit away with all the market forces and market subsidy nonsense. Just build more HDB flats for the people and keep it for Singaporeans only, even in the resale market. The prices will stabilize and be lowered progressively. Owners of public housing must not aspire to see their flat prices shooting to the roof like private properties. But the good news is that all Singaporeans will have a roof over their heads and not having to pay through their noses and emptying their CPF and savings. There will be money left for retirement and some finer things of living. The flat would still have real value and no need to sell back to the HDB and creating more unseen problems in the future.

The Housing Minister has made public housing so complicated and confusing. That does not mean that the solution must be complicated and confusing. Do not create new schemes that would make the situation more complex and hazy. Just work with the current system, get rid of some of the nonsense.

The solution must be straight and simple. Build more flats for Singaporeans at cost plus, not that the govt must make a loss, but with the aim of providing the citizens, not PRs, with decent and genuinely affordable housing. Not the kind of flexible affordable housing that can be stretched like rubber bands. Is this so difficult to do? Think simple. No need to think clever. When a house is infested by termites, there is no need to build another house. Just treat the termite problem. And often the problems in a country are due to too clever people in charge. What a country needs is good men and not very clever men. With good men and good intention, many unnecessary problems will not arise, like the housing woes today.


oldhorse42 said...

I will not buy a flat under NOM scheme,too!SDP just do not understand human nature. Greed and fear of lost face are two great motivators in decision making.Just talk to another car sales person and one can learn that the deluxe model of any make will outsell the basic no frill model.
HDB flats new and old should be sold to citizens only and scrapped the scheme that allow owners to rent out the whole flat.HDB should be for owner occupation and not investment.

Anonymous said...

[Get the basics of public housing right]
Written by Ng E-Jay
"The first and foremost task is to rectify the huge imbalances and distortions in the housing market which has been caused by the government rigidly controlling the supply of flats and selling them at a market subsidy, rather than at the cost price of construction."


Anonymous said...

Look at how the $8 minister making healthcare affordable when he was the health minister, I have loss confidence on him. We need more co-driver to help them make U turn or make him teach us how to buy HDH house with $8.

Anonymous said...

When customers are affected by food poisoning from bad seafood, you don't build another restaurant or cold room. You just get rid of the supplier of bad seafood and enforce quality checks.

Yes, no need to create new problems.

Anonymous said...

You can't change Singapore's dismal HDB housing mess without first changing the government.
Nothing will change under this current PAP regime.

Matilah_Singapura said...

Here we go again with the ding-dong "let's fix this mess" public housing.

Public housing over the years has morphed into "real assets" in the minds of "owners". The fact that you can trade HDBs in a (reasonably) open market is politically and socially locked into culture and institutions in SIngapore.

At the end of the day, you get "cognitive dissonance" -- on the one hand people are fed up with foreign emigration, on the other hand they are happy to see their "asset" go up in "value" (??).

You forget that people act on their world view -- what they believe, their idea of their own "identity" and how their being relates to the rest of the world, beginning with their own immediate environment and circumstance. You can say that people are "self deluded" -- but there's no point -- becasue they will ACT anyway in their interests, not yours.

Public housing will always be a mess -- because of the political intrusions, the fact that units were built on stolen land, the belief that "everyone is entitled"...and then prices are let loose on the open market. Plus MAS is printing money to match Bernanke, China, India, Japan and the Euro-trashes. (all guilty of big money printing). More money means more money chasing a scarce supply of goods -- prices will rise.

Too many conflicts. Unworkable situation.

Try and drop the price of HDB too much, and those who hold HDBs will be rioting on the streets....which too me will be AWESOME entertainment!

patriot said...

Me likes to say that there are far too much houses in Sin. Maybe my idiotic impression is that there could be about 70% surplus housing if foreigner are barred from buying them for the last 5 years.
There are not that many Sinkies setting up family and if they do, not all can qualify or afford to buy their own house.

Who buy those property sprouting everywhere in Sin?


Chua Chin Leng aka redbean said...

SDP is trying very hard to come out with an alternative. Unfortunately barking up the wrong tree.

The solution is simple but there is no political will to do it, or because too much vested interests have led to capitulation.

Anonymous said...

The political will is to drop their pay (at least 50%) first including the CEOs in the government sector. They need money to feed all these people. So in the end we all suffer.

Anonymous said...

Red bean, I am afraid I have to disagree with you on this one. While in theory what u said make sense unfortunately it will not be politically acceptable as most sinkie can not accept a reduction in paper gain s
And sinkie that bought recently can not accept losses as cost plus will mean a major correction in prices.

Padaly said...

Yes simple solution to a complicating problem will do. Back to basics is a simple solution. The question is will they forgo such a lucrative revenue sector? Control the supply of public flats to keep prices high. Then "subsidize" market prices of flats - which is the result of speculation by PRs and locals in the resale mkt with limited new flats. Its a wuestion of playing with the law of supply and demand. The largest landlord HDB is the price giver and arbitrator here! Once you are addicted to easy money, you will never change. You can't see reason and you are hopelessly addicted to fast money! That is the crux of the problem. Many of us still don't get it!

Anonymous said...

Money is the greatest motivator
for the Sin Leaders.

Anonymous said...

I agree that foreigners ie PRs should not be allowed to buy HDB flats. They were NOT allowed to buy these in the beginning anyway, Mah Bow-Bow allowed them partly to help clear the backlog of new HDB flats indirectly.

A lot of these PRs have the insidious intention to retire back home after selling off their HDB near retirement. In essence, this is leeching the country of economic fruits accrued during the productive years, compared to a citizen who stays vested.

In any case, PAP has made a humongous mess out of public housing with so many rules and st-rangulations that we must vote these idiots out.

You bet there will be some new "tweaks" from PAP on housing very soon...

Matilah_Singapura said...

I support any measures to keep the HDB price high and rising.

I do so because of pure self interest.


Anonymous said...

Many are waiting for an imminent showdown like those in the Middle-east.

auto said...

Many FTs turned SCs also can get a flat with subsidy and then can get their foreign citizenship back very easily. While many native SCs cannot even get a flat.

Anonymous said...

I agree with you - SDP "solution" will have unintended consequences and create its own set of monster problems.

What would I do, if SDP solution were implemented?

I'll buy a cheap NOM flat and also leverage myself to the max to buy a private property. Stay in NOM flat, collect rent from private property. So the private property prices go into a frenzy.

If I'm a PR, I'll definitely buy a NOM flat. And rent it out. Fantastic yield - maybe 20%?

In fact, NOM flats is now suddenly so cheap that its a steal!! $180k 5-room flat?? Cheaper than Shanghai, Mumbai?? Why not??

The queue for new flats multiply overnight. People get upset HDB cannot build enough flats to satisfy demand.

Non-NOM flat buyers get pissed that suddenly their value has dropped. Those servicing 30 years or 40 years mortgage curse the SDP to eternity for changing the rules halfway overnight and leaving them stranded with such debt. Yes, they can opt for the NOM scheme - but guess what : if they've paid 10 years of loan, they've also paid 10years of interest too. Who's going to compensate them for the loss?

Many many years ago, public servants were offered a choice - stay with pension scheme or convert to the then new CPF scheme. Most stayed with pension, some converted. Many years later, many regreted their decision and pleaded for things to be reversed.

Unintended consequences.

Chua Chin Leng aka redbean said...

The SDP proposal has its merits. But I think it will come with a basket of problems too.

Anonymous said...

Looks like the govt is determined to be 'populist' here by not allowing property prices to fall.
Because there will certainly be a backlash.

But if not now, when? If you don't bite the bullet asap, the problem is going to get bigger.

And 20 yrs down the road, it will no longer be just a housing price problem. The problem will be all those thousands of Sporeans, who don't have a job becos they're old, and who have no savings and too little in their CPF for them to have even an indecent standard of living.

Chua Chin Leng aka redbean said...

My position is to stop the rubbish policies and do the necessary. It is as simple as that. Hypocrisy and insincerity cannot be hidden for too long. The veil is transparent.

Anonymous said...

sdp is doing what it needs to do... so that some ppl wont say they are not constructive or just a no-idea-party... at end of the day, sdp's plan wont be adopted... coz precisely the plan is from sdp.. dats y...

Anonymous said...

be it SDP solution PAP solution or any solution, there will be unintended consequences.. if anyone thinks we can unwind this whole mess without blood being shed, then you must be dreaming..

the question is: how much blood will be flow and from where this blood flow...

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