3/16/2014

A new dream, not owning a home



Nina Brown lost her townhouse to foreclosure due to recession. That was not the only house she lost, but another three. She now lives in a rented home. The American Dream of home ownership is crumbling. With recession, foreclosure, and more recession in the pipeline, more Americans are giving up on home ownership. This seems to be a new trend in the world’s biggest economy.


Could this be something that Sinkies would be looking forward to, renting their homes instead of home ownership, though some are saying that we have been renters all the time, at least 80% of them living in HDB 99 year leasehold flats? This is another story.


At the moment many are still in the property speculation game when money makes money and lots of money without having to work. Would the same outcome in America hits us the same way when a major recession comes along? Would our young and new home owners, with their massive debt from housing loans ended like Nina Brown, facing foreclosure and become the statistics of a new fad, renters?


We are following closely at the heels of the Americans in everything they do. When they got a cold, we will surely have one as well. How long can we hold before the next wave of recession and foreclosure hits the City? The only way to avoid such a crisis is to push property prices higher and kick the can further down the road.


But if we are to listen to what came out of Parliament, the problem crisis is over and we should be congratulating the ministers and ourselves that all is well. No longer a problem, all problems solved. In fact it is time to raise the prices of properties or else the developers would start to kpkb again.


What do you think? The next dream will be not owning cars.

Kopi Level - Yellow

38 comments:

Anonymous said...

just look around us......

there are plentiful of completed, empty, and unoccupied housing units, yet the property prices are sky high.....

furthermore, the value of yr HDB flats and 99-yr leasehold properties will become ZERO at the
end of their leases no matter how good they are.

Many buyers ended up taking long 30-yr loans for their 99-yr properties.

Think about it. How can the price of a DEPRECIATING-in-age property continue to go up and up.

No one dare to talk about this tricky issue now. But the day WILL come. 99-yr is
not far away!

Cheers

Anonymous said...

/// .... Sinkies .... renting their homes instead of home ownership ...... renters all the time, at least 80% of them living in HDB 99 year leasehold flats? ///

redbean
HDB flats are not 99 year lease hold homes.
HDB flats are just leases ... like a car lease.

A 99 year leasehold flat means that at least we have the rights of ownership for 99 years to our flat.
An example of ownership is the right to rent out our HDB flat without needing to get HDB approval.
But we can't even rent out our HDB flat without first getting HDB (owner)'s permission.
So HDB flates are 99 year leases NOT even 99 year lease hold.

Anonymous said...

So if we are renting our HDB flats from PAP government.
And the HDB flats belong to the PAP government.
And 80% of Singaporeans live in HDB flats.

Therefore the home ownership rate in Singapore is only 20%.
And this is the lowest rate of home ownership in the world.

Did somebody in the PAP government lie to Singaporeans all these years?

Anonymous said...

Red Bean

The borrowing scheme is totally different, and they like to buy more than they could afford, so facing these sort of situation is pretty common in the states, and having so many houses, with the slow economy and the rise and fall of prices are never as in sin city, it might take 10 years or even longer just to break even, whereas here its just months.

Pretty poor comparision if you take the us in comparision.

Merlion said...

@ anon 10.51 am // But we can't even rent out our HDB flat without first getting HDB (owner)'s permission.
So HDB flates are 99 year leases NOT even 99 year lease hold. //


Anon 10.51 am, let me ask you the following questions:

1) Do you stay in a HDB flat?

2) How long have you stayed in one if the answer is Yes?

3) Do you have a neighbour staying next door or opposite?

For the social media views to gain traction and/ or credibility, it is better that everyone should refrain from shooting off their mouths. It is unlikely helping the cause of championing the alternative views.

Anonymous said...

There is no problem when 60% Sinkies are rich, happy and satisfied and strongest opposition is still not ready to be govt.

And no riots by Sinkies. Riots by foreigners still OK to handle.

If I were the PM of a country, this kind of situation is my dream. What more to expect, u tell me lah?


Anonymous said...

"The next dream will be not owning cars."
RB

For ordinary Sinkies, this is not a dream but should in fact be the case.

If I were PM Lee, I will even make sure a Sinkie is a multi-millionaire before he can afford a car.

Matilah_Singapura said...

The "property speculation game" only works -- and only for a limited time -- when the money printing has gone berserk making interest rates low which lure people into taking out big loans to bid up prices of tiny shoe-box properties to insane levels.

No need to work, like RB says. Just borrow money and buy, buy, buy, and blow up that credit bubble until it engulfs the whole economy. This is what the central bankers of almost every state have done -- monetizing debt the government has issued for "stimulus". The total world debt is 30-40% LARGER than it was in 2007-2008, and most of the debt is held by sovereign states. The world's total GDP to Debt ratio is well over 300%.

This cannot end well -- unless you are waiting for the eventual crash to "steal" distressed assets for pennies on the dollar ;-)

So you want to own a home? Relax. Give it time. Save money, and be patient. When the bond investors get fed up from being paid with lower-value printed dollars, they are gong to all head for the door at the same time and the bonds are going to drop like shit in a toilet. Central banks will panic and raise interest rates, which makes money "scarce" and the prices of assets will fall.

BTW, there is a new subprime housing crisis developing. So when the shit hits the fan many people will lose their homes. But also many other people will be able to pick up homes at rock-bottom, bargain basement prices.

..and dun worry about cars. When the massive global deleveraging occurs, no one will be buying, car loans will probably be double-digits and thus the COE will drop like nangka busok because very few will be bidding.

Relax. Prepare. Be patient. Deflation akan datang.

Anonymous said...


this world is rather interesting and fantastic.....

on one hand, property prices keep moving up on their own......

on the other hand, in reality, there are many many empty unoccupied units crying loud out there for buyers and rental.....

be careful be careful.......

cheers.....

Merlion said...

@ Matilah 11.24 am:
// This cannot end well -- unless you are waiting for the eventual crash to "steal" distressed assets for pennies on the dollar ;-) //

// So you want to own a home? Relax. Give it time. Save money, and be patient. //

// ..and dun worry about cars. When the massive global deleveraging occurs, no one will be buying, car loans will probably be double-digits and thus the COE will drop like nangka busok because very few will be bidding.

Relax. Prepare. Be patient. Deflation akan datang. //


When Matilah talks sense, he is lumber 1! This is essentially how the cycle works. With the next big crash which can be next month, next year, another 3 or 5 years, nobody can tell for sure but when it comes, likely many will be burned until "Chow Tar". On the other hand, many smart and patient sinkies have made millions or tens of millions, some even more scooping distressed assets during the 2008/ 2009 GFC ( Global Financial Crisis ) and via leveraging the gains were easily 500% and above within a 3 year period. How can it be?

Let's say an investor bought a condo at S$1 mil in early 2009. During that time, his investment plus stamp duty plus conveyancing fees etc is about S$230,000 assuming he took an 80% loan as all the recent years cooling measures had not kicked in yet in early 2009. By end 2012, this property would have easily undergone a capital appreciation of more than 100% and sold for more than S$2 mil. So his profit is comfortably more than a mil net but his initial outlay only about S$230,000 thus netting a return of about 5 folds or 500%.

Of course under the current new TDSR regime, LTV ( Loan to Value Ratio ), ABSD ( additional buyer stamp duty ), SSD ( Seller Stamp Duty ) etc it cannot be done this way but when the next big downturn hits, and MAS starts dismantling all cooling measures in place, those patient and cash rich sinkies can wade in and make a killing again.

Having said that, greed likely have hit many sinkies and many could not resist the incessant temptation over the past two years and many likely have bought in at the "peak" fulfilling the financial world jargon of what they called the "Greater Fools". It would not be surprising many are now caught holding on to highly-priced properties that are at the same time not easy to find tenants. It is even worst for soon to be TOP properties coming on stream over the next 2.5 years. All these are likely bought during the peak in 2012/ early 2013.

Speculation is like gambling. Who to blame but own self for greed and ignorance. Emotional control is paramount in investment. Otherwise, better keep the hard earned cash under the mattress .....

Anonymous said...

Did anyone said HDB is the real owner of the HDB flats? Then why are the lessees paying property tax on behalf of HDB?

Anonymous said...

/// Then why are the lessees paying property tax on behalf of HDB? ///

Even better.
Why are lessees paying for structural repairs on the HDB flats that they don't own?
Do the tenants living in condos pay for the lift upgrading?

Anonymous said...

@ March 16, 2014 11:12 am

Please answer the question:
Who owns the HDB flats that we stay in?
HDB or the Singaporean "owner"

Anonymous said...

An iron fist makes hapless citizens. Note, hapless not happy. By the way price of kopi is going up and if in Sinkie land so is price of water. Caught in a web of "best available to govern" conspiracy. A tragic situation to be in indeed.

Merlion said...

@ anon 10.51 am
// But we can't even rent out our HDB flat without first getting HDB (owner)'s permission.
So HDB flates are 99 year leases NOT even 99 year lease hold. //


@ anon 12.36 pm
//@ March 16, 2014 11:12 am

Please answer the question:
Who owns the HDB flats that we stay in?
HDB or the Singaporean "owner"//


Let's address anon 10.51 am view first.

1) Hypothetically, if his view is taken up by an opposition MP and raised in parliament, wouldn't this "poor MP" be "hantam" left, right, centre by the incumbent's MPs?

Essentially, all the rationales for regulating HDB flats are quite obvious.

Assuming anon 10.51 am stays in a HDB unit with his family say wife and 2 teenage daughters. His neighbour, if not restricted by HDB's regulations, sublet the unit to a construction company and to save cost, the employer housed 20 to 30 Indian/ Thai/ Bangladeshi workers inside. Would he find it acceptable? If potential “drunk” foreign workers outside his doorsteps, can anon 10.51 am work and sleep peacefully everyday? Wouldn't he worry for his wife and daughters personal safety and security getting in and out of his flat? Even if he is at home and any incident enveloped any time, can he handle a bunch of workers without putting his own safety at risk? So every week he must end up calling the police? How to go about living his life like that?

Also, likely all kinds of other "problems" may unfold right? Laundry problem along the corridor/ outside the flat, drinking, littering, noise and what have you.

Hypothetically, without regulatory control, anon 10.51 am other neighbours also start subletting likewise and soon 90% units of the entire block are swathed with foreign workers. Can anon 10.51 am accept such a situation?

And this is just one possible likely outcome. Many other things can happen along the way ....

If an opposition MP "gong gong" take up anon 10.51 am suggestion and raise in parliament, won't he/ she be "hantam" left, right, centre?

Anonymous said...

1) If Singaporeans really "own" their HDB flat ... how come HDB can tell Singaporean HDB flat owners to move out under SERS (selective en bloc)?

2) How come 3 entire block of HDB flat owners not allowed to en bloc sell their HDB flats to a private property developer?

@ March 16, 2014 1:38 pm
This PAPig still dare not answer my question.
Who owns the HDB flat?
HDB or the Singaporean flat "owner"?

Anonymous said...

Do not waste time waiting 4 the Answer.

Merlion said...

>>> 1) If Singaporeans really "own" their HDB flat ... how come HDB can tell Singaporean HDB flat owners to move out under SERS (selective en bloc)?

2) How come 3 entire block of HDB flat owners not allowed to en bloc sell their HDB flats to a private property developer?

@ March 16, 2014 1:38 pm
This PAPig still dare not answer my question.
Who owns the HDB flat?
HDB or the Singaporean flat "owner"?

March 16, 2014 2:07 pm <<<



2) Regarding anon 12.36 pm question, frankly likely nobody including many here “see” the shortie guy or the one before him as “angel with wings in pure white” lah ..... including the regime ( sad to say but isn't many governments worldwide and historically like that ? ).

Ideally, best is sinkies can buy HDB flats at low prices but with free hold status but which government will and can do that including a future government hypothetically governed by current opposition?

Thus, the status may be not a pure white or black but depending on perspective. Nonetheless, a pure lease would be forever paying rent with no possibility of capital gains. How you term this unique creation ( HDB flat ) by the incumbent may be an academic exercise in this capitalist society. You can call it a “cat” or “dog” or whatever name. At the end of the day, it is neither a pure lease based solely on rental or a freehold property but during the balance tenure the “legal owner” can “trade” it in the market for profit or monetize it which a purely rental agreement would not have. Furthermore, rental agreement under current law maximum is not more than 6 years in the private tenancy agreement otherwise you need SLA or relevant authority approval. This implies that if you rent, every two to three years the owner can “disturb” you and raise rental. HDB flat at least the price is “fixed” already and the mortgage payment will change only when interest rate increase or decrease which is still far manageable than dealing with an exploitive landlord.

Having said that, recent years housing markets have in many ways “gone hay-wired” due to external and internal factors and not exactly “helped” by timely intervention or measures for whatever reasons. ( $$$$$ ? )

So there you go.

Greed in individuals, private sectors and public sectors can cause serious imbalances and dislocations in society.

Obviously, if anybody/ opposition can come out and “promise” freehold HDB properties at leasehold prices or lesser, surely many would “get in” but is it feasible?


Btw, am not a fan of shortie(s) but go ahead and show your "civility" to the world and call whatever name your "like"

Do you know what is "黑白分不清"?

Anybody you "buay song" you lump them "papigs", "bootlickers" ...., like that social media alternative views and acceptance how to go far and be embraced by majority of sinkies ?

Anyway ------- ~~~ ------- ( THE END )

Merlion said...

>>> 1) If Singaporeans really "own" their HDB flat ... how come HDB can tell Singaporean HDB flat owners to move out under SERS (selective en bloc)?

2) How come 3 entire block of HDB flat owners not allowed to en bloc sell their HDB flats to a private property developer?

@ March 16, 2014 1:38 pm
This PAPig still dare not answer my question.
Who owns the HDB flat?
HDB or the Singaporean flat "owner"?

March 16, 2014 2:07 pm <<<


Halo,

wishful thinking lah ....

not working for shortie(s) ......

anyway you "buay song" go raise it and ask during MPS .....

can suggest to them having 24/7/ 365 online MPS

here is just a blog

lol

some more RB's blog

nou under purview of "pappig" or "bootlickers"

ha ha ha

how to answer those questions about SERs?????

You dragged the whole grandfather, grandmother problems one after another endlessly the MPS open 48 hours also can cope .....

Merlion said...

** "also cannot cope"

Anonymous said...

No need to ask PAP MP about ownership of HDB flat. Just vote Opposition. We will ask that question for you in parliament. Huat ah!

Merlion said...

typo error >>>"exploitive landlord"

"exploitative"

Veritas said...

PAP forever use lies and all sorts of financial engineering to bluff us that all is fine-- in fact everything have become worse.

HDB getting smaller and more expensive.

Car getting affordable.

College Tuition fee hike like crazy.

Only thing is salary remain stagnant.

Now PAP tell graduate to peddle food, and tell our son not to study, so that all cognitive jobs will be given to foreigners.

If we buy PAP's shit, next time PAP will tell our daughter to be prostitute and our son to be shit collector.

Anonymous said...

Would you believe a govt that talked about education as the leveller and the meritocratic path to a better life now turned around and said university education not necessary?

What is their wicked agenda?

Anonymous said...

/// What is their wicked agenda? ///

To become rich at our expense?
Throughout history, self serving rulers are always enriching themselves at the expense of their daft, trusting and loyal citizens.

But our PAP Ministers are definitely not like this.
Our PAP Ministers are on our side.
Vote PAP to improve our lives after GE 2016.

b said...

Just rent here and own somewhere cheaper, better, nicer. Gov is trying to facilitate people to migrate cos they are also convinced that some other places are much better than sg. They know very well that sg is not substainable. Thats why they invested so much overseas instead of sg.

b said...

>>417pm

Correct. PAP minister is always on the sinkies side but they are also clearly aware of the limitations of this island. Thus, they try very hard to make the sinkies understand that they should sell out when they can and get out as living is really much better on the other place. Just look at the last few years policies, isnt that very obvious? They want us to migrate very badly so we can achieve our dream of landed house and affodable car but some people just want to stay around and then kpkb they cannot have house and car.

Chua Chin Leng aka redbean said...

Building economic and industrial parks for sale is a smaller version of building an island for sale.

Anonymous said...

Traitors are very good at selling out their countries to foreigners for cash.

Are there any traitors in Singapore?
Does Singapore have a long established tradition of distinguished traitors?

Anonymous said...

They are crazy enough to use public money to bail out foreign companies that are deep in debt. Can you believe it? Throwing away billions like banana money.

Anonymous said...

$2.1 billion dollars for a trading company.
The real value of a trading company lies with the human traders.

They must think Olam traders are like Sinkies.
Too stupid to sell their shares, leave and start a new trading company ... duplicating the old Olam.

Anonymous said...

We all know what Santa Claus does best. And that is 'ho ho ho'

We all know what Temasek is famous for and that is 'ching ching ching' - the sound of money going down the drain.

Put the two together and there we have it.

Anonymous said...

Meanwhile they tell Sinkies they need more money put into CPF for them to draw upon. So Sinkies have to work even harder and older to feed the CPF blackhole.

More good years they say. For some, that is a dream turned into nightmares.

Anonymous said...

You're back!

Nice to hv u back.

Anonymous said...

What makes you so sure that they ate not, was the sister island not sold?

China Wen Zhou said...

@ b 4.33 pm >>> They know very well that sg is not substainable. Thats why they invested so much overseas instead of sg. <<<



According to one prominent economist who are very familiar with the Chinese economic structure etc, his assesment is that the likely demand from the Chinese economy for raw materials in the foreseeable future is likely going to be weak.

Based on some reputable international media surveys and reports, many Australian miners are making only about one-third or a fraction of their hey days income.

Thus, the above-mentioned economist view is that there is a possibility countries like Australia might become the next Spain in terms of their real estate sector.

If according to your previous few days comments that Sg sovereign funds are massively investing in countries like OZ, it may be helpful and easier for everyone if you can provide the link to the source of such information.

Based on recent months empirical economic data from the Chinese side and the mining stories out of OZ, it seems to confirm that in the foreseeable future, it may serve investors interest to stay away from the OZ market especially real estate sector with a 10-foot pole?

Those investment info you mentioned seems to be running contradictory against the empirical observations emerging from the key economic indicators emanating from these two economies?

China Wen Zhou said...

Typo:

** According to one prominent economist "who is" not "who are"

Chua Chin Leng aka redbean said...

Welcome to the blog China Wen Zhou.

Many govt are simply naive or easily deceived into a state of euphoria. Today, with hot money flowing freely, one day they will flood the market, then they pull out and people will be hurt.

China is using its economic clout very well. Fed the Aussie mining industry into a frenzy and when the Aussies tried to be funny, just pull out and the Aussies suddenly see a blank wall, no money coming in.

This applies also to small economies like Sin. Hot money comes in everyone happy, prices all up. Then they pulled out and there is a drought. All crying.