Why does the Government continue to be in a state of denial on the 99-year lease issue?

I refer to the article “HDB resale flats to become less attractive, as buyers look for better store of value: Credit Suisse report” (Todayonline, Sep 19).

It states that “Stating that the proposed Voluntary Early Redevelopment Scheme (Vers) is “not a panacea” to the public housing lease decay issue, a Credit Suisse report released on Wednesday (Sept 19) expects the price gap to widen between Housing and Development Board (HDB) flats and private apartments over time.

Increasingly, those who can afford it will also turn to private homes as a better store of value. As a result, the proportion of residents living in HDB flats will continue to decline.

According to the report, the proportion has fallen from 88 per cent of households in 2000 to 79 per cent last year.

“We believe it will likely take some time for residents to understand the evolving narrative on the nature of HDB flats — from one where HDB flats are a good store of value and attractive investment class that will continue to appreciate, towards one where we are likely to see a steady diminution in value as we approach the end of the 99 year lease, following which the flats will revert to the government,” said Credit Suisse research analysts Louis Chua and Nicholas Teh, who penned the report.

The report described the Vers announcement — which was made during this year’s National Day Rally — as a “good starting point”. This is because it recognises that the majority of HDB flats will not qualify for Selective En bloc Redevelopment Scheme (SERS),  and hence will be returned to the government by default, while giving homeowners “partial autonomy in addressing the lease decay”.

“Rather than a panacea however, we believe the announcement… will bring about a paradigm shift in our understanding of the nature of HDB flats, where lease decay is a real and pertinent issue,” the report said.

It noted the absence of “critical details” of the proposed scheme, particularly relating to compensation.

Still, a key concern was that Vers is “not applicable” to the entire existing HDB stock of about 1 million units today.

Noting that one of the stated aims of the scheme is to spread out redevelopment, the report pointed out that flats with 10 years of lease remaining would theoretically be worth only half of flats with 30 years left.

“As the nature of the 99-year HDB lease is increasingly better understood, we believe potential resale flat buyers would likely demand a greater discount to prevailing market prices, given the heightened risk of the flats having zero residual value at the end of its lease life,” the report said.”

So, when even international expert reports say the obvious – why does the Government continue to be in a state of denial, by not substantively addressing the HDB 99-year  issue?

As to “In comparison, there is an established collective sale process for owners of private properties, through which developers can acquire the land for redevelopment purposes, subject to the consent of at least 80 per cent of owners in the estate.

The report argued that this means leasehold private residential properties would retain greater value as their leases depreciate, as compared to HDB flats.

Property analysts TODAY spoke to, however, felt that the report’s predictions were premature.

Associate Professor Sing Tien Foo, who is the Director of the Institute of Real Estate Studies at the National University of Singapore, also pointed out that private properties and HDB flats have different objectives. Hence, it does not make sense to compare both types of properties, he said.

“It’s difficult to put them on the same level field to compare. Public housing is… meant to make housing affordable for the everyday man,” he added” – isn’t this kind of akin to stating the obvious, that public housing should by definition be affordable, and not be the most expensive public housing (ratio of price to income) in the world?

So, why does the Government continue to be in a state of denial, by not substantively addressing the HDB 99-year  issue?

With regard to “Assoc Prof Sing said the projections made in the report were based on the combined value of both the buildings and the land, and the assumption that this value will become zero when the lease expires.

However, he noted that the land still has a value, even if the value of the buildings sitting on it falls to zero upon lease expiry.

“Real estate is a unique asset, which consists of both building and land… unlike (a) car whose asset could depreciate to zero. Whereas for real estate, the land value could appreciate in value, if the redevelopment potential increases,” he said” – this is yet another ‘stating the obvious’.

Since the land retains its value at the end of the 99-year lease – why does the Government continue to maintain the immoral policy of taking back the land with the consequence of zero value and wiping out the CPF used too?

So, why does the Government continue to be in a state of denial, by not substantively addressing the HDB 99-year  issue?

In respect of “With the Government reviewing whether to relax financing regulations for older HDB flats, Suntec Real Estate Consultants director of research and consultancy Colin Tan added: “Financing restrictions on loans and use of Central Provident Fund savings have a crucial impact on prices because property is a very big ticket item… We must remember that the most important characteristic of property is location.

“So if financing are lifted, the first to benefit would be well located properties,” he added” – since it was the Government which created the current problem in the first place, by changing the policy a few years ago, on restrictions on the use of CPF and housing loans for older HDB flats – why does the Government continue to be in a state of denial, by not substantively addressing the HDB 99-year  issue?

 

Leong Sze Hian

 

 

 

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34 Responses to “Why does the Government continue to be in a state of denial on the 99-year lease issue?”

  • WHAT pap does?:

    What PAP is doing now is exactly what ALL the past Dynasties n Govt did before the end of each of the regimes. The fundmental cause is greed breeds more greeds n evils piled over evils to generate new cycles of greeds. The of plps also multiply till there wasn’t any good men left to clear the shits piled up by the greeds as they too have to leave to follow their conscience. Strange or divinely scheme that PAP is enterong the suidal phase with the tode of awakening of the vaious citizenry of the power is not in the regime but in the poplace since the beginning of time otherwise hisyory would not have records of dynssty went down n new dynasty evolved ss of poltical philosophy dynasty, dictators, tyranny or nepotism, capitalism or communism or even democracy when regime death came invariably with over self indulgent modification to save but really only delaying the death process. The derogatory. ingratitude, greeds, self gratification, self glorification leading to arrogance n humilation r glaring sign of decay n the beginning of the death process. Najib pre election arrpgance n ce happened just becos GE fell 2 years han SIN. PAP was UMNO so arrogantly confident n the female factor contributing to the death process can be seen to be similar in character but not in material.
    Only idiots would now think that not all power corrupt or absolute er does not corrupt absolutely due to the cowardice to response to granting NS deferment to une of no NS commitment for a son of minister, deputy PM n President n equally passive e of ferent in treatment of scholarship contract between a son of a working widow n the nepotic decendent. Squeaking clean is left only with squeaking echoing from the dark holes. Ad the cliche goes. It is not there is no karma, it is a matter of time. or Divinity chooses its time for retribution mysteriously may be to allow the to spin their own rope. Hallejuia, au ni tor fu,
    memuji tuhan,Kaṭavuḷ pukaḻntu….

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  • Bystander:

    Simple. They dun have the solution. After instructing Lawrence Wong to remind HDB owners their properties will revert back to the Govt at end of 99 lease, this reminder backfired and caused widespread alarm and unhappiness even among PAP supporters.
    PM Lee quickly tried to do damage control by offering Vers with a cock and bull story to pacify the people.
    Just revertingf back to its old form, be both the devil and the angel.

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  • Malaysia boleh Singapore bodoh:

    Actually, the planned VERS is just a “tweak” of the LBS (Lease Buyback Scheme). HDB would buy the unused lease at a price determined solely by HDB. The HDB owner would then be able to buy a new flat at basically “full price” with a “cosmetic” (i.e., token) discount. Where would the buyer get the money when his/her CPF account is depleted and he/she only got “peanuts” for selling back unused lease to HDB.

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  • Malaysia boleh Singapore bodoh:

    Another compelling reason for REGIME CHANGE.

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  • oxygen:

    PEASANTS ARE LESSEE, not owners of the flat they bought. That is why the Credit Suisse report is correct on this count.

    “We believe it will likely take some time for residents to understand the evolving narrative on the nature of HDB flats — from one where HDB flats are a good store of value and attractive investment class that will continue to appreciate, towards one where we are likely to see a steady diminution in value as we approach the end of the 99 year lease, following which the flats will revert to the government,”

    THE COMMON LAW ALSO SUSTAINS THAT FLAT PURCHASERS ARE NEVER OWNERS of their flat.

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  • Anonymously:

    When citizens state the obvious, it is called Fake News.
    When government apologists state the obvious but irrelevant issues to mitigate govt position, it is called ” Experts commented that blah blah…”

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  • Enslaved:

    The pertinent question should be why they lied to the us that they will make public housing “affordable” when its rental rate is close to “DOUBLE TO TRIPLE TIMES” those of freehold private properties especially when the land can be recycled similar to eternity of freehold? This is highly out of proportion and only an idiot will say that it is “affordable”.

    But, these highly paid bustarps will use their english to bully us, as cocky as – “Because many people “owner” of flats so it “affordable”.

    With these kind of uncaring gartament that enslaved us, we have NO quality of life, won’t you agree?

    We need to “Volt” for Change so that they will respect us and treat us like human and return our money!

    Do the Maths:
    Do the Maths;

    600K HDB flat for 99 years = $600,000 / 99 years = $6060 per year.

    1.2M Free Hold say 999 years = $1,200,000.00/999 years = $1,201.201 per year.
    [Serangoon Garden Best time]

    OR;

    2.4M Free Hold say 999 years = $2,400,000.00/999 years = $2403 per year.

    How come your Gartament treat you like that?

    So, you continue to Mandate so that they play maths and market and deplete your CPF????

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  • Rabble-rouser:

    PAP’s Asset Enhancement Policy for real estate & for brick ‘n Mortar assets were a senseless & an unsustainable idea that will bring down S’pore ultimately. Property-based assets can’t be a one-way path to prosperity (& retirement) for people because a country must have a broad-based economy (entrepreneurs, private sector enterprise, creative industries, multiple means of generating income & cash flows, etc) to buy property. See S’pore & the PAP for what it is – a Crony Capitalist economy, a Paramount State-controlled feudal aristocracy, People are secondary whilst the political elites are everything (LKY’s doctrine)! How can there be Prosperity for the masses?
    How can there be prosperity (& dignified retirement) when power (thus wealth) accrue to the very top (political elites). On that note, you got to be really stupid if you think S’pore property provides the path to riches. It is a GREATER FOOL GAME – a PONZI SCHEME WHERE THE EARLY BITDS CATCHES THE WORM BUT THE LATECOMERS ARE CAUGHT & ROASTED FOR FOOD.
    Even that Credit Suisse report is full of logic holes;
    1. “that private homes as a better store of value.” Tell that to any Sentosa Cove property owner & he’ll refute that. The truth is that private property on psf basis in S’pore is already too high! You’ll need substantial bank borrowings & significant income sources to service that debt. But with interest rates rising & global liquidity flowing back to the US – There’s a liquidity crunch coming! Plus the level of underemployment & unemployment for locals are just too great! Psf prices are unsustainable!
    2. “…the price gap to widen between Housing and Development Board (HDB) flats and private apartments over time.”
    Without HDB Upgraders (selling HDB flats for a profit to parlay equity) to provide liquidity boost to private apartments – How can there be a price gap? Wouldn’t private apartments fall in lockstep with the decline in HDB flat instead.
    Credit Suisse research analysts Louis Chua and Nicholas Teh aren’t property investors in the real sense. Just rote-learners with academic qualifications!

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  • Rabble-rouser:

    “Real estate is a unique asset, which consists of both building and land… unlike (a) car whose asset could depreciate to zero. Whereas for real estate, the land value could appreciate in value, if the redevelopment potential increases”
    Another economic fallacy! If one is really perceptive (both economically & technologically), real estate is just a commodity (no unique qualities at all). The Global Economy is shifting from a Brick ‘N Mortar Economy to Cyberspace Economy (Online retailing & automated websites). That in turn depressed the real estate value over time.
    The Narrative “Whereas for real estate, the land value could appreciate in value, if the redevelopment potential increases” is clouded by a New Paradigm Shift where geographical location is irrelevant but clusters of like-minded intelligent people thriving under a favourable & liberal eco-system is. Think San Francisco, Seattle, etc. How can an Authoritarian regime elicit & harness economic values thus creating value appreciation for land. When their thoughts are continually lying, cheating & robbing people of their hard earned blood, sweat & tears (CPF, HDB lease decay, COE, etc). What I write – true or not?

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  • Tom Lee:

    Even if the ruling to use CPF is relax, the buyer is going to lose his CPF monies when his HDB continues to depreciate to Zero. The crux of the matter is that the HDB flat is not an asset but a liability that sucks away your CPF, your retirement funds and your dependents’ inheritance.

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  • HarderTruths:

    The 99 year lease issue cannot be resolved.

    That is why it cannot be brought up – especially before this ‘last’ election where the pappies will do away with real elections altogether and replace it with something that keeps them in power forever.

    Then it does not matter – since it is no longer an election issue as there will be no fair elections. Mark my words once GE 2019/2020 is over $G will become worse than the former USSR.

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  • Just Kick Them Out:

    PAP is not in denial but purposefully to rob Sinkies of their hard-earned money.
    Every policy and step is to systematically milk you of your wealth.

    Kick all Pappies out of government to get your wealth back.

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  • Let Me Tell You Why...:

    They are behaving like Najib before 9 May 2018. So confident that they will win the next GE.

    What will hit them is their denial that Voters lack the wisdom to vote them out.

    It is timely, we Singaporeans show them the ‘yellow card’!

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  • Bapak:

    If they admit the 99-year issue, there will be a riot they cannot handle. They don’t want to wake up the still in deep slumber 70% Sinkies.

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  • rukiddig:

    Heh,heh, heh,……

    And it was “who” who tried to “manipulate ” the resale and new flat prices ?

    Oh,…let me see…yes, yes,…it all happened when a “Mr Woody” was in place.

    And yes, yes,..I “benefitted” from it..I sold off my 70k ,5 room for 240k after 8 years…ha,ha,ha,…and I “upgraded” to a freehold …which was then “enbloc” for 1.5 m ,..after 10 yrs.

    Was I happy ?

    Yes,…but that was ….initially

    Soon after,…I realized I was in a “Game plan”…a “Grander Plan” by this Greedy Pappy to “pushed up” the “Baseline Value” of its public 99 year flats inorder to become “richer” overnight and “continued t be rich” in its coffers as long as they are in Power.

    Fast forward…..and What is happening today ????

    My OWN Son could not afford to buy ???….even as a Graduate ???

    And the worst was,….even Pte landed ptx and commercial rental…all “SHOT UP”.

    Why?…the Landlords and Ptx owners “jumped on the band wagon” and “took the “cue” from Pappy and “started to screw and take advantage” of the lesser.

    If Pappy was TRULY TRANSPARENT,…they would have “voluntarily released” information of the ASSETS the Ministers and MPs own.

    I bet you,…you did be surprised to find out that probably,…MANY ( as high as 70%) of the Pappy Ministers, MPs and Senior servants ..”owning” more than 1 property …and many are Pte and not HDB .

    To make it worst,…I am even willing to “add” and “bet” that many MPs are themselves “in conflict of interest” ,..because there are many of Pappy MPs that don’t work FULL TIME for the people ( whist unshamely collecting their obscene 18k every month)….PLUS…MANY are DIRECTORS of MANY OTHER COMPANIES.

    How will they and CAN they not be in “conflict of interest”???,…when these MANY COMPANIES are “crying wolves” about SINKIES NOT WANTING JOBs ????…when in truth,…all these companies ( together with these Pappy MPs) are “planning and aiming” to “reduce Manpower Cost for maximizing for more profits “?????

    How could those “working class voters” from the 70% Group NOT SEE THIS ???

    How could , the whole nation not see this….that these Pappy MP’s interest were probably “Not doing for the general group of people’s interest”…..BUT “they” were probably “working for their own interest PLUS the interest of the BETTER OFF Group from within that 70% ,who are most probably Bosses, Landlords …are driving BIG EXPENSIVE CARS and themselves Living in BIG PTE LANDED Property ????

    In truth,..we have a LOUSY LEEDER,…as LEEDER whose “whole life” was living in a GOOD LIFE, MOLLY CODDLED,..SILVER SPOONED..CAREER PATH already well laid….even can become a BG ,when many doubted if he was that “military Fit and able”???

    He…

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  • HDB land:

    “Assoc Prof Sing said the projections made in the report were based on the combined value of both the buildings and the land, and the assumption that this value will become zero when the lease expires.
    However, he noted that the land still has a value, even if the value of the buildings sitting on it falls to zero upon lease expiry.”

    If I read the Director of the Institute of Real Estate Studies at the National University of Singapore correctly, he seems to imply that the HDB property even with the lease at the final ten years of the lease still can command good value BECAUSE the land still has a value.

    I am shocked because Assoc Prof Sing seems to say that the HDB owners can reap the value of the appreciating value of the land below them. This is NOT true because the land is owned by HDB and the appreciating value accrue totally to HDB, and hence the government.

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  • Return my money:

    Therefore taking reference and scaling to multiple units and multiple floors, a 5 room flat should be around $80K.
    I bought it at 250K, Please return $170,000 to my CPF account and on top of that return earned compound interests for 10 years @4% per year, otherwise I tell you, my vote will go elsewhere.
    Please return before next GE. thank you.

    Enslaved:
    The pertinent question should be why they lied to the us that they will make public housing “affordable” when its rental rate is close to “DOUBLE TO TRIPLE TIMES” those of freehold private properties especially when the land can be recycled similar to eternity of freehold? This is highly out of proportion and only an idiot will say that it is “affordable”.

    But, these highly paid bustarps will use their english to bully us, as cocky as – “Because many people “owner” of flats so it “affordable”.

    With these kind of uncaring gartament that enslaved us, we have NO quality of life, won’t you agree?

    We need to “Volt” for Change so that they will respect us and treat us like human and return our money!

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  • Undaft:

    Another new normal awaiting in next GE if issues were not addressed a la MBT (housing) and RL (transport) while the indian chief remained inaction then.

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  • oxygen:

    @ HDB land

    EVERY CASE LAW I READ on property rights says only LAND IS PROPERTY – anything else sitting on top is just “trespass” liable and vulnerable to eviction. Only land is PERMANENT AND INDESTRUCTIBLE – that explains why land has perpetual value in fee simple (the law word for property in perpetuity in layman terms).

    Public housing in LEE-jiapore is cunning of construction. Peasants paid for the land BUT NO LEGAL TITLE to it as a lessee. The land belongs to PAPpy who is the owner who holds absolute right of command and determination to demolish any structure above the land surface it owns.

    It is mischievous to claim that peasants owns their flat they purchase – it is only a lease of diminishing value to lease expiry. The asset enhancement politics driving its price to astronomical height is a scam transferring wealth from the poor to the rich.

    At lease expiry, the value flows to the landowner specifically and exclusively. PEASANTS ALL GOT DUPED, at least from what I see of case law or common law decisions in UK, OZ, NZ, Canada, HK and USA at minimum. There is no value outside landholding ownership. Any claims otherwise is HYPOCRITICAL OF TRUTH IN LAW OR PLAIN DUMB IGNORANCE of buyers.

    The Chancery of law equity has no regard, sympathy or remedy for any dumb subject (buyers too stupid to even begin to discover they are stupid to impossibility) entering into any severely disadvantaged transacted contract.

    HDB land: “Assoc Prof Sing said the projections made in the report were based on the combined value of both the buildings and the land, and the assumption that this value will become zero when the lease expires.
    However, he noted that the land still has a value, even if the value of the buildings sitting on it falls to zero upon lease expiry.”

    If I read the Director of the Institute of Real Estate Studies at the National University of Singapore correctly, he seems to imply that the HDB property even with the lease at the final ten years of the lease still can command good value BECAUSE the land still has a value.

    I am shocked because Assoc Prof Sing seems to say that the HDB owners can reap the value of the appreciating value of the land below them. This is NOT true because the land is owned by HDB and the appreciating value accrue totally to HDB, and hence the government.

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  • oxygen:

    @ Rabble-rouser

    BRILLIANTLY SAID, that Credit Suisse report is full of logic holes indeed. When asset prices get repriced downwards, desperate sellers looking for the highest bidder below his/her cost price and found it so deep down (since HDB prices have collapsed) they are trapped of die by suicide plunge or die by forced mortgage sale plunge. With few buyers at the bottom, someone will dived down and that becomes the reference benchmark valuation for the rest of desperate private property sellers.

    Given that private condos are priced higher on purchase, THEIR LOSSES MUST BE FAR BIGGER. It is impossible for private homes to offer a better store of value. IMPOSSIBLE. Both analysts at CS probably have never seen what the meltdown in a financial market in their lifetime. I stared at the screen of such a meltdown on 19 October 1987 – IT IS A LIFE TIME MEMORY and tuition which no one would want to be of first hand experience of licking wounds.

    Rabble-rouser: Even that Credit Suisse report is full of logic holes;
    1. “that private homes as a better store of value.” Tell that to any Sentosa Cove property owner & he’ll refute that. The truth is that private property on psf basis in S’pore is already too high! You’ll need substantial bank borrowings & significant income sources to service that debt. But with interest rates rising & global liquidity flowing back to the US – There’s a liquidity crunch coming! Plus the level of underemployment & unemployment for locals are just too great! Psf prices are unsustainable!
    2. “…the price gap to widen between Housing and Development Board (HDB) flats and private apartments over time.”
    Without HDB Upgraders (selling HDB flats for a profit to parlay equity) to provide liquidity boost to private apartments – How can there be a price gap? Wouldn’t private apartments fall in lockstep with the decline in HDB flat instead.
    Credit Suisse research analysts Louis Chua and Nicholas Teh aren’t property investors in the real sense. Just rote-learners with academic qualifications!

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  • nihon:

    that lawren wrong has the making of mabok tan.

    he is v good for the opposition.

    now, hdb is a wasting asset. BUT as a lessee you have to pay property tax as ‘owner’.

    this return to zero hdb policy is a political blunder by the white scums.

    that jap 007 will pretend and kick the can down the road, busily collecting monies and lying to you that hdb will only go up in value.

    fortunately, I decided not to be lied to.

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  • Inter-generational INEQUITY:

    rukiddig: … And yes, yes,..I “benefitted” from it..I sold off my 70k ,5 room for 240k after 8 years…ha,ha,ha,…and I “upgraded” to a freehold …which was then “enbloc” for 1.5 m ,..after 10 yrs.

    Was I happy ?

    Yes,…but that was ….initially

    Soon after,…I realized I was in a “Game plan”…a “Grander Plan” by this Greedy Pappy to “pushed up” the “Baseline Value” of its public 99 year flats inorder to become “richer” overnight and “continued t be rich” in its coffers as long as they are in Power.

    Fast forward…..and What is happening today ????

    My OWN Son could not afford to buy ???….even as a Graduate ???

    Here is a father who, like hundreds of thousands of others, relished the prospect of ever-increasing property prices, and was also lucky enough to have had monetarily benefitted from the exhilarating ride!

    The ideological and instrumental underpinnings for this property frenzy have been the JUNK ECONOMICS of infinite growth in a finite planetary system, coupled with the financialisation of the economy, both of which are now turning out to be disastrous in their ecological and social consequences.

    There are also many other (grand-)fathers/mothers – whether dwelling in public or private housing – who are waking up to the reality that their (grand-)children cannot afford their first homes. Home prices have simply galloped way ahead of wages, apart from the escalating costs of living (and costs of doing business), worsening job uncertainties, etc.

    Our society is now experiencing a rude awakening to what may be called INTER-GENERATIONAL INEQUITY: whilst the fathers/mothers have cheered on the relentless rise of property, many of their children are finding that they cannot afford to start their families in their own (decently sized) homes, and can already foresee a dreadful retirement (whether voluntary or forced, in view of dwindling job prospects) without sufficient savings.

    This is the gift of more than three decades of the biggest game in town, the PONZI property game, driven by the policy promises of the ASSET ENHANCEMENT of HDB flats and augmented by excessive immigrant influx, which together provided the requisite price buoyancy for the private property market.

    The economy morphed into one driven more by speculative activities – marked by the ascendance of financial capitalism, aided by the government-developer-banker (GDB) nexus – rather than by truly productive activities. The financial and social consequences of this economic choice and transformation is now being inflicted upon the new/young generation and the retiring / retired generation.

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  • G-D-B Nexus:

    It would be helpful to understand the workings of the government-developer-banker (G-D-B) nexus, and its corrosive impact on society, in particular the family. In any case, there has been the overt celebration of that nexus by naming new public hospitals in Singapore after property developers or real estate tycoons, e.g. Ng Teng Fong.

    PART 1

    Let’s start with the following excerpt from a report titled “The “Hong Kong”-ization of Singapore Property” dated 30 Sep 2013:

    http://sg.finance.yahoo.com/news/hong-kong-ization-singapore-property-073850731.html

    … the shrinking of flats and a redefinition of what a “bedroom” stands for. Whereas in the past a “bedroom” referred to a room that was big enough to comfortably fit a queen-sized bed, two side tables and a wardrobe, “bedrooms” in some projects cannot even fit a standard-sized double bed.

    With property prices rising faster than incomes in recent years, and the government’s cooling measures and debt curbs constraining affordability, this “Hong Kong”-ization of Singapore property has become an inevitable trend as developers design units that people are willing and able to buy (but perhaps not willing to live in), while propping up their sales and margins.

    I don’t know if you’ve seen a Hong Kong apartment before, but I once visited one where you could only open the bedroom door halfway as it was blocked by the single bed in the room. And there was nothing else that could fit into the room – just the single bed. And perhaps you’ve heard of the toilets so small that you could only enter it by reversing in.

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  • G-D-B Nexus:

    Government-Developer-Banker (G-D-B) Nexus (continued)

    PART 2

    http://atimes.com/atimes/China_Business/NH02Cb01.html

    Aug 2, 2012

    The myth of a free Hong Kong economy
    By Eddie Leung and Pepe Escobar

    … The dark secret at the heart of Hong Kong is the unmitigated collusion between the government and a property cartel – controlled by just a few tycoons; the Lis, the Kwoks, the Lees, the Chengs, the Pao and Woo duo, and the Kadoories (more about them on part 2 of this report). These tycoons and their close business associates also happen to dominate seats on the 1,200-member Election Committee that chooses Hong Kong’s chief executive.

    … When the Sino-British Joint Declaration was signed in December 1984, sealing the 1997 handover, … The champagne popped all around Paragraph 4 of Annex III of the Joint Declaration; it limited the amount of land that could be granted in Hong Kong in any one year to just 50 hectares. That also paved the way for a Land Commission, which could grant extra land when the ceiling was attained. Essentially this set up guaranteed that land in Hong Kong would always be in short supply – thus it would always be expensive. Ergo, the perennially high property prices.

    i.e. the economics of artificial (or engineered) scarcity !

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  • G-D-B Nexus:

    Government-Developer-Banker (G-D-B) Nexus (continued)

    PART 3

    The bankers naturally salivate at the prospect of bigger and bigger loans.
    As explained in the reports cited below, the commercial banks are empowered (or licensed) to CREATE the money (for the loans) by the electronic keystroke – literally out of thin air – when they approve and extend their loans to property purchasers. The debt-based money is created at the instance that the loan amount appears electronically as a bank deposit in the name of the borrower, in this case a property buyer. Thereafter, the borrower – the DEBT slave – would have to work – perhaps for the rest of his working life – to earn the money to pay back the bank, both the principal amount (which was created literally out of nothing) and the interest.
    Why then would the banks not be headquartered in the most expensive of buildings in the most central of locations in cities?!?

    The bigger the financial bubble(s) the merrier are the bankers.
    If any of the bubbles were to collapse and the “Too Big to Fail” banks were to be distressed to the point of potential failure, they can expect to be bailed out by governments, as amply evidenced by the QEs (Quantitative Easings) to the tune of trillions of dollars ‘printed’ by the US Fed, followed by similar actions by other major central banks around the world forced into competitive devaluation of their respective currencies.
    What really is in action is a political economy in the service of the financial and political elites or oligarchies, rather than true market economy.
    It is EXTREME SOCIALISM for the rich (controlling the big corporates and banks), but enforced AUSTERITY (by such devices as regressive taxation, e.g. GST, spending cuts, militarised policing, etc.) for the masses hopelessly spoiled by social welfare entitlement mentality!
    This is largely how and why the world has graduated rapidly from being populated by millionaires to billionaires to, now, budding trillionaires to … !

    http://norberthaering.de/en/32-english/news/826-buba-on-money
    Bundesbank corrects textbook mistakes on money creation, rejects 100%-money
    09 May 2017

    http://norberthaering.de/en/32-english/news/830-buba-100-percent-money
    Bundesbank rejects 100%-money based on sophistry and false claims
    15 May 2017

    … With some delay, Bundesbank has joined the Bank of England in explicitly stating that the treatment of banks and money creation in most textbooks is wrong and that banks are not intermediaries, transferring money from savers to investors, but rather creators of money.

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  • Evil Hypocrite Greedy Thieves:

    HDB land:
    “Assoc Prof Sing said the projections made in the report were based on the combined value of both the buildings and the land, and the assumption that this value will become zero when the lease expires.
    However, he noted that the land still has a value, even if the value of the buildings sitting on it falls to zero upon lease expiry.”

    If I read the Director of the Institute of Real Estate Studies at the National University of Singapore correctly, he seems to imply that the HDB property even with the lease at the final ten years of the lease still can command good value BECAUSE the land still has a value.

    I am shocked because Assoc Prof Sing seems to say that the HDB owners can reap the value of the appreciating value of the land below them. This is NOT true because the land is owned by HDB and the appreciating value accrue totally to HDB, and hence the government.

    PAP government is just lying to rob you of your money. It was already said by some smart netizens many times already. The land has value and it’s not zero. Hardworking sinkies paid for the land right from the start using their CPF. In fact, the maintainence is also paid by sinkies just like any private property. The PAP government lied outright to you about asset enhancement, or some greedy PAP ministars quietly made a policy shifted along the way, leverage it’s power, hookwinked sinkies, to sell you a rental contract instead.
    At the end of the lease, the wealth of the appreciated land should be returned to what sinkies had paid for. But instead greedy PAP try to rob this from you, declaring it as zero value or give you miserable token sum through VERS, robbing you of a hard earned retirement, pushing many into poverty.

    To change this is to vote the greedy evil PAP government out!!
    There are many many workable examples in other countries already, SDP also proposed workable solution. In is only because the PAP is trapped in it’s own greedy mindset that they could not come up with something better and reasonable.

    Just kick the PAP out, the rest will fall in place!!

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  • Only One Important Rule:

    Kick out the greedy Pappies from government.

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  • oxygen:

    @ Inter-generational Inequity

    BRILLIANT INSIGHTS AND informing publishing. It is inter-generational exploitation of our children survival chance for current generation greed consumption and MORE CRUELLY OF VICIOUS DECEPTION a scam of PAPpys vote harvesting preying on dumbfarked peasants. ALL TRE readers read this comment and circulate to your mates TO EDUCATE THE 70% SHEEP.

    Thank you for sharing. SALUTE, SIR!!

    Inter-generational INEQUITY: Here is a father who, like hundreds of thousands of others, relished the prospect of ever-increasing property prices, and was also lucky enough to have had monetarily benefitted from the exhilarating ride!

    The ideological and instrumental underpinnings for this property frenzy have been the JUNK ECONOMICS of infinite growth in a finite planetary system, coupled with the financialisation of the economy, both of which are now turning out to be disastrous in their ecological and social consequences.

    There are also many other (grand-)fathers/mothers – whether dwelling in public or private housing – who are waking up to the reality that their (grand-)children cannot afford their first homes. Home prices have simply galloped way ahead of wages, apart from the escalating costs of living (and costs of doing business), worsening job uncertainties, etc.

    Our society is now experiencing a rude awakening to what may be called INTER-GENERATIONAL INEQUITY: whilst the fathers/mothers have cheered on the relentless rise of property, many of their children are finding that they cannot afford to start their families in their own (decently sized) homes, and can already foresee a dreadful retirement (whether voluntary or forced, in view of dwindling job prospects) without sufficient savings.

    This is the gift of more than three decades of the biggest game in town, the PONZI property game, driven by the policy promises of the ASSET ENHANCEMENT of HDB flats and augmented by excessive immigrant influx, which together provided the requisite price buoyancy for the private property market.

    The economy morphed into one driven more by speculative activities – marked by the ascendance of financial capitalism, aided by the government-developer-banker (GDB) nexus – rather than by truly productive activities. The financial and social consequences of this economic choice and transformation is now being inflicted upon the new/young generation and the retiring / retired generation.

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  • SureDie:

    You become slaves in a barren land(without resources and fruitless) and never see your promiseland. These are useless leaders of higher learning and ever higher pay scale who die by their own arrogance and pride in their concrete achievements.

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  • Rabble-rouser:

    @ Inter-generational INEQUITY:
    Isn’t it simpler to just call it:
    * A GREATER FOOL GAME – where the early birds get the worms but the latecomers get caught & roasted in the concluding phase of the ‘property game’ by being the greater fool eg. $1 million buyers of HDB flats;
    * A PONZI SCHEME – where the promise of higher returns & cash payouts bring in masses of investors into this rigged market without realising that it is a unsustainable bubble. As greedy investors plough back their cash payouts for higher levels of participation – the scheme becomes too big to run, harder to keep investors happy because the cash had run out (thus trapping the investors’ monies) unless substantial new investors come in or existing investors liquidate other assets (or assume debt) to plough in more money. Re: Bernie Madoff’s PONZI SCHEME; EnBloc process (for Private property), HDB lease decay/land recycling.
    * A MULTI-LEVEL MARKETING PYRAMID – where the Promoters & their cronies sell a ‘dream’ of untold riches & unique products/insatiable wants. The masses are enticed to participate by recruiting more people into this ‘dream’ & by buying some of the expensive stuff. But the real winners are the Promoters of the ‘dream’; even their cronies end up being played out after the dust settles – PAP govt being the 80% owner of S’pore lands & the ultimate rent-seeker. Re: PAP Asset Enhancement Policy; A “supposed” retirement asset ie. HDB rising values against lease decay of depreciating value; ‘owning’ cars in S’pore with a 10 year COE, etc.
    Isn’t it better to tell it as it is? Instead of making complex statements & constructing convoluted arguments? It’s not Economics 301 – INTER-GENERATIONAL INEQUITY, you know.

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  • Calling a Deer a Horse:

    When you dish out half truth, selective truth, and lies, you have to do it all the way. When Najib was in power, who in his cabinet dare to say his billions were stolen. He even have barking dogs running around to defend him. Similarly with our HDB 99 year become kosong in value issues, the government unleashes many barking dogs to continue to defend and deny the truth.

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  • LIONS:

    Hdb shud go back to its primary objective of HOUSING sgs.
    No more BS.
    NO MORE EXCUSES.
    If lease is unfair,change it or extend it.
    Lim Kim San was MND before n his land was not acquired?
    These elites make sure only poor man’s land parcels got CONFISCATED?
    Theirs worth millions,tens of millions or 100 million now?

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  • Bapak:

    Please give them the ‘Red Card’.

    Let Me Tell You Why...:
    They are behaving like Najib before 9 May 2018. So confident that they will win the next GE.

    What will hit them is their denial that Voters lack the wisdom to vote them out.

    It is timely, we Singaporeans show them the ‘yellow card’!

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  • Half baked Ass Prof:

    HDB land:
    “Assoc Prof Sing said the projections made in the report were based on the combined value of both the buildings and the land, and the assumption that this value will become zero when the lease expires.
    However, he noted that the land still has a value, even if the value of the buildings sitting on it falls to zero upon lease expiry.”

    If I read the Director of the Institute of Real Estate Studies at the National University of Singapore correctly, he seems to imply that the HDB property even with the lease at the final ten years of the lease still can command good value BECAUSE the land still has a value.

    I am shocked because Assoc Prof Sing seems to say that the HDB owners can reap the value of the appreciating value of the land below them. This is NOT true because the land is owned by HDB and the appreciating value accrue totally to HDB, and hence the government.

    This Sing chap likes to write commentaries whenever property issues become hot potatoes but with little solid empirical evidence and tend to slant to support the G pollicies.

    His commentaries are half baked and lack academic rigours to be worth reading. They are usually published in Shit Times.

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