Time to stop the housing ponzi

The pioneer of Singapore’s public housing, Dr Liu Thai Ker, has spoken on the need for HDB to return the basics. Dr Aline Wong also joined the call. HDB should go back to provide a roof for all Singaporeans. More and more senior elites from the establishment are saying that things are not going right and needed to take a step back. And the solutions offered by Liu Thai Ker to stop the housing ponzi are not calculus but simple common sense. Build public flats with no frills and build a little extra to the supply. The prices of public housing will adjust accordingly.

The same call was made by Boon Wan but with many catches. Back to basics to offer cheaper flats will necessitate adjusting the products for sale and one could end up buying half an apple, like shorter lease, conditions to sell back to HDB and all the jazz. Why like that?

In today’s media, it was reported that 2 rm and 3 rm flats can be sold at a net price of $57k and $159k respectively after setting off the grants. Hey these prices are quite decent and reasonable. If this can be done, why is there a need to tweak the terms of sales to bring down the prices? Many silly suggestions to make HDB prices cheaper were made by muddle head Singaporeans. The actual cost of building public flat is very much lower and the sale price can be brought down without all the silly suggestions. The fact that the cost of building the flats is being kept secret is telling a big story.

What so far transpired in the media is that the Govt is preoccupied with the need to keep property prices going up. If we don’t bring in more migrants, property prices will come down. What rubbish. Now you understand why 6.9m is necessary? It is to prop up property prices as part of the ponzi scheme. The SERS and en bloc sales will not be feasible without more and more buyers in the pipeline. Every old flat pulled down must be replaced by 5 new flats to justify the cost of rebuilding. Thus, it means you need 5 times the buyers to sustain the scheme. The population must continue to grow even after 6.9m if the property price is go be kept up.

This gravity defying act, by meddling with market forces and supply and demand will all come to naught without the increasing influx of migrants. The 99 year lease will dictate that all such flats must end up with zero value unless they can be pulled down before the lease expires. The ponzi scheme must come to an end sooner or later as the island just cannot keep taking in more and more people and the price of flats keep going up while the workers remain as CBF.

It is better to stop the ponzi housing scheme now with lesser people being hurt and less badly than to allow it to snowball to monstrosity and beyond control, like the American national debt. Too big to do anything or unsolvable without a total collapse of the system.