TR EMERITUS

[EDITORS' NOTE: This letter was submitted to us by Mr Ng Kok Lim who had two letters published earlier by the Straits Times Forum on rising prices of HDB flats. Please feel free to send us your letters at [email protected]] I refer to the letter "People should be free to decide what a flat is worth: HDB" to the Straits Times dated 14th Sept 2009. HDB claims to be responsible for sustaining flat prices over the long term.  Looking at resale flat prices from 1990 to the present, sustenance of flat prices hardly needs worrying about as increases in flat prices have far outstripped increases in peoples' incomes.  Conversely, shouldn't it be HDB's responsibility instead to ensure that increases in flat prices do not outstrip the people's capactity to pay for them? The title of the letter itself suggests a misconception surrounding the myth of "willing buyer, willing seller" so often perpetuated by the HDB.  The fact that HDB is claiming to be responsible for sustaining flat prices means that it has the means to influence the overall price level of HDB flats.  That is the crux of the issue.  While people are free to decide how much to price their flats, their decision cannot deviate significantly from market conditions that are largely controlled by the HDB itself, through such mechanisms as controlling the amount of land that it releases to the public and the number of new flats that it builds.  Ask ourselves, how can we sell our flats at a premium when the govt is building one exactly the same right next door to be sold at cost?  It is because the govt isn't building them or isn't pricing them at cost or is choosing to release the land for private condominimums for example that resellers are able to command the premium that they are getting. The situation is not unlike the case of a sole importer monopolising the rice trade.  If he opens up all his warehouses and distributes the rice to all the shop keepers, there will be plenty of rice for everyone and no one will have to pay a premium for rice.  But the moment the importer restricts his supply of rice such that supply barely meets demand, people will start to fight over rice and the shop keepers will now be able to command a high price for rice.  That is exactly what is happening to our HDB resale market.  By not supplying enough new flats, the HDB creates the conditions for the resale market to heat up. The HDB claims that the total number of bookings for HDB flats with grants amounts to 13,000 to 15,000 units each year, which far exceeds the 8,000 new flats HDB is building this year.  So isn't this clear evidence that the HDB is not building enough new flats to satisfy demand? The HDB claims to have enabled 80% of the population to own their own homes.  But going by the exhorbitant price people have to pay for house ownership, house ownership becomes a terrible liability rather than a proud asset that the people can be proud of. I refer to the letter "People should be free to decide what a flat is worth: HDB" to the Straits Times dated 14th Sept 2009. (read letter http://singaporeenquirer.sg/?p=4619) HDB claims to be responsible for sustaining flat prices over the long term.  Looking at resale flat prices from 1990 to the present, sustenance of flat prices hardly needs worrying about as increases in flat prices have far outstripped increases in peoples' incomes.  Conversely, shouldn't it be HDB's responsibility instead to ensure that increases in flat prices do not outstrip the people's capactity to pay for them? The title of the letter itself suggests a misconception surrounding the myth of "willing buyer, willing seller" so often perpetuated by the HDB. The fact that HDB is claiming to be responsible for sustaining flat prices means that it has the means to influence the overall price level of HDB flats.  That is the crux of the issue. While people are free to decide how much to price their flats, their decision cannot deviate significantly from market conditions that are largely controlled by the HDB itself, through such mechanisms as controlling the amount of land that it releases to the public and the number of new flats that it builds. Ask ourselves, how can we sell our flats at a premium when the govt is building one exactly the same right next door to be sold at cost?  It is because the govt isn't building them or isn't pricing them at cost or is choosing to release the land for private condominimums for example that resellers are able to command the premium that they are getting. The situation is not unlike the case of a sole importer monopolising the rice trade.  If he opens up all his warehouses and distributes the rice to all the shop keepers, there will be plenty of rice for everyone and no one will have to pay a premium for rice.  But the moment the importer restricts his supply of rice such that supply barely meets demand, people will start to fight over rice and the shop keepers will now be able to command a high price for rice. That is exactly what is happening to our HDB resale market.  By not supplying enough new flats, the HDB creates the conditions for the resale market to heat up. The HDB claims that the total number of bookings for HDB flats with grants amounts to 13,000 to 15,000 units each year, which far exceeds the 8,000 new flats HDB is building this year.  So isn't this clear evidence that the HDB is not building enough new flats to satisfy demand? The HDB claims to have enabled 80% of the population to own their own homes.  But going by the exhorbitant price people have to pay for house ownership, house ownership becomes a terrible liability rather than a proud asset that the people can be proud of. Ng Kok Lim Other letters by Mr Ng Kok Lim published in the Straits Times Forum: >> Do criteria reflects reality? (5 September 2009) >> Affordability of homes (26 September 2009)  Read More →

From our Correspondent The online petition started a week ago to the Singapore government to build more affordable HDB flats had collected 865 signatories so far, 135 short of its 1,000 target. Despite recent pronouncements by the National Development Minister Mah Bow Tan and various HDB officers on the affordability of HDB flats, many Singaporeans remain unconvinced and skeptical of their claims. While most of the comments are left by Singaporeans sharing their personal experience of being priced out by the booming resale market, some criticized the government for not doing more to help them. Wrote Homeless: "Just view a 5 rooms unit in sengkang. what i can say about this unit is, it's a total EMPTY unit...no kitchen carbinet, no build in, normal ceramic flooring, no reno at all....valuation at 395k, but the bloody seller asking 450k...55k cov to buy an empty house?? to add on, this unit is not near mrt, it's 900m fr sengkang mrt...this is no longer a supply demand situation, the whole resale market is crazy now....who's care us?? just wan to tell the "supply-demand saying" people, u r not in our shoes...can all these homeowners understand the feeling of continuous searching house for 8 months...every weekend walking from block to block, and looking at the cov getting higher and higher...now even up to 55k for an empty unit?? pls dun talk from your warm blanket..." Teo Han Siang added: "Just went out to see few unit at Jurong West, not need to mentioned, can't make a deal. COV 50k and the house is totally empty, the seller agent said now a day COV is standardized at 40K. No 40K means not possible to deal. Very dissapointed after hearing that. After this, I went to see flat at Jalan Bahar, not matured state, and the owner asking 30k. The house also empty plus low floor." Even those who already bought a flat are complaining. Leow Chee Yong said: "Male, 28, married to Indo-chi wife with 3 year old son. Staying with parents while waiting for punggol flat(4-room) to be ready. Bought it at almost 300k in 2008 and pay for it myself. Probably have to loan 30 years and when i am 60, i will have 0 CPF for retirement as all used to pay my flat.(not forgetting that CPF contribution is 20%-employee, 14,5%-emlpoyer and capped at $4,500.00) My brother, 36 married with 2 kids who bought a bukit batok hdb(4-room) 5-6 years ago at less than 150k has already fully paid his flat. He is also the only person paying for the flat. Imagine the gap." Alfred Ong questioned Minister Mah's assertation that one third of the transactions are done at zero COVs: "What Mr Mah had said "that a third of transactions are done at zero COV.".. I think he is using those property that has the valuation over 600k. If the valuation is so high,of course the COV is zero. HDB said the valuation of all HDB are valued by private agency,does that mean the government has no control over the cap of valuation?" Someproof provided evidence of sellers asking for exorbitant COVs: "Some proof, try calling below: 1)Tampines Blk 894 EA - Asking 100K COV - 9777xxxx(S$500K) 2)Tampines Blk 306 5I - Asking 32K COV , low floor - 9765xxxx ($410K) 3)Tampines Blk 486A 5I - Asking 50K COV - 9008xxxx (S$430K) These are just a few example and u can call to check, close to half a mil for a FLAT???? This is HDB!! NOT Private" Wendy Koh is still counting on the Singapore government to help her: "HDB should lower down the valuation prices. Now the valuation is so much high and add in the COV, making the total buying prices so high up. If we will to buy at such high price, we will be letting the housing loan tight down us in our next 30 years loan instalment. Wondering why the last past few years to now the valuation can go up so much higher to over S$60,000. Is the "garment" really not going to help the singapore citizens to buy their so call OWN HOME to START A FAMILY??? Are we really not able to buy our HOUSE with the prices increases now and "garment" is not going to do somethings to help us???????" Sandwich class relates the plight of Singaporeans who earned more than $8,000 and hence not qualified for any HDB "subsidies": "HDB is 99 year leasehold property. Valuation should decline annually after the owners "consume" its usage with passage of time. By NOT decreasing in valuation is already a "Gain" to HDB prices. Rising land development charges in Singapore has caused higher independent HDB valuation in recent years. (home price to household income have risen to recent peak – that’s why there are dissidents in the field today because people feel the PAIN). It is OK to value flats at market prices - so existing 80% of population HDB owners can enjoy the gain on the single most expensive asset they own. It is OK to bring in foreign talents – so Singapore can achieve the economic structural change and ambition. BUT please institute policies to aid Singaporean Citizens buy their FIRST PUBLIC flats, which are increasing at a faster pace than average Singaporean Citizen's salaries. Policies CAN be calibrated and sensitized to changing economic landscape in Singapore. The 8,000 line you have drawn made it easy for your office to implement policies. BUT your ease of execution comes at the expense of hardships felt by many Citizens - those who were conveniently and painfully cut off. Our lower income Citizens earning less than 8,000 who were lucky enough to ballot a HDB are better off than the higher income peers in the sea of rising COVs or private psfs. Today (higher GDP and rising HDB prices) should not come at the expenses of her citizen's Future – the Future of Citizens who made less than 8,000, and those who made more than 8,000." Citizen loyal exposes the fallacies of the public housing market in Singapore: "Housing is a basic necessity and demand is inelastic. No matter how high the price is, people will still pay since there is no alternative. It takes a few years for a house to be built, hence supply is also inelastic. Developers know fully that during shortages, it will take few years for new stock to come into market. A profit oriented developer will price their units higher, as there will always be willing buyers. However, the willingness to pay does not equal affordability. This will cause problems when housing prices starts to fall. There is nothing wrong with market-based pricing. It is easy to implement from government's point of view. It is a fair and equitable. When the market is "free", demand and supply will adjust continuously. No problems. The next question is, how "free" is the market? There is no market which is truly free. This is especially true for real estate where no two units are identical. Demand side: - Government population policies, which affects the demand - Government sets the CPF rulings - MAS determines property financing rules (DFS, IAS etc) Supply side: - Government controls the land and decides on the land supply - HDB regulates 80% to 85% of the market. - GLC linked developers control another 5-10% of the market. It is very clear how "free" the market is. Another problem is the obsession with GDP figures. Bringing a large pool of foreign workers pushes GDP up, without the need to train and wait for new generation of workers. These workers participated in the economy to produce goods and services. During recession, they would leave. However, if the price of a house can be inflated, then by doing nothing constructive, GDP grows. Wonderful magic indeed. Hence, it is easy to boast 8 percent growth, but how many people really benefit from such asset inflation? Currently, the supply of private housing outstrips that of cheap HDB public housing. By building less public flats and more public flats that approaches private condo, especially in terms of price, the sign is clear. The days of cheap general public housing is over. There is only one way to go: higher psf prices result in smaller units." From the comments left by Singaporeans on the petition, it appears that there is a growing number of people who are becoming peeved and disgruntled at government's insensitivity and inaction. On the other hand, the government cannot do more to reduce the prices which will earn the wrath of sellers and existing home-owners. Singaporeans have been fed the myth that HDB is an "asset" whose value will inflate with time. For those who bought their flats recently, a sudden depreciation in their valuation will plunge them into dire economic straits. While the petition provides an interesting read, it will hardly have an impact unless the 1,000 signatories turn up in Hong Lim Park and protest in front of the international media. The crux of the issue does not lie with HDB or COVs, but the fact that Singaporeans have so sheepishly signed off their political rights to the ruling party which dominates and control the entire public housing market without competition through which it dishes out perennial pork-barrel politics packaged as benign "upgrading" to coax and coerce Singaporeans to vote for them. The impending housing crisis is an excellent opportunity for the opposition to leverage on it and to galvanize support from the ground. All Singaporeans need right now is a leader, somebody who can listen to them, empathize with them and voice out their deep-seated concerns, angsts and frustrations. Unfortunately, it doesn't seem that our opposition leaders are feeling the pulse of the people either. It is little wonder that most Singaporeans have the perception of them making a "cameo appearance" only once in five years during the elections. Source: http://www.thepetitionsite.com/1/lower-hdb-valuations-or-build-more-affordable-hdb-housing-for-singaporeans  Read More →

At an extraordinary meeting of the World Motor Sport Council held in Paris on 21 September 2009, the ING Renault F1 team (“Renault F1”) admitted that the team had conspired with its driver Nelson Piquet Jr. to cause a deliberate crash at the 2008 Singapore Grand Prix, in breach of the International Sporting Code and F1 Sporting Regulations. Renault F1 stated at the meeting that it had conducted a detailed internal investigation, which found that: (i) Flavio Briatore, Pat Symonds and Nelson Piquet Jr. had conspired to cause the crash; and (ii) no other team member was involved in the conspiracy.The FIA has conducted its own detailed investigation and its findings correspond with those of Renault F1. At the meeting of the World Motor Sport Council, Renault F1 made the following points in mitigation: - it had accepted, at the earliest practicable opportunity, that it committed the offences with which it was charged and cooperated fully with the FIA’s investigation; - it had confirmed that Mr. Briatore and Mr. Symonds were involved in the conspiracy and ensured that they left the team; - it apologised unreservedly to the FIA and to the sport for the harm caused by its actions; - it committed to paying the costs incurred by the FIA in its investigation; and - Renault (the parent company, as opposed to Renault F1) committed to making a significant contribution to FIA safety-related projects. Nelson Piquet Jr. also apologised unreservedly to the World Motor Sport Council for his part in the conspiracy. The following decision was taken: The World Motor Sport Council finds that Renault F1 team members Flavio Briatore, Pat Symonds and Nelson Piquet Jr. conspired to cause a deliberate crash at the 2008 Singapore Grand Prix. The World Motor Sport Council therefore finds Renault F1, which, under article 123 of the International Sporting Code, is responsible for the actions of its employees, in breach of Articles 151(c) and point 2(c) of Chapter IV of Appendix L of the Code, and Articles 3.2, 30.3 and/or 39.1 of the Formula One Sporting Regulations. The World Motor Sport Council considers Renault F1’s breaches relating to the 2008 Singapore Grand Prix to be of unparalleled severity. Renault F1’s breaches not only compromised the integrity of the sport but also endangered the lives of spectators, officials, other competitors and Nelson Piquet Jr. himself. The World Motor Sport Council considers that offences of this severity merit permanent disqualification from the FIA Formula One World Championship. However, having regard to the points in mitigation mentioned above and in particular the steps taken by Renault F1 to identify and address the failings within its team and condemn the actions of the individuals involved, the WMSC has decided to suspend Renault F1’s disqualification until the end of the 2011 season. The World Motor Sport Council will only activate this disqualification if Renault F1 is found guilty of a comparable breach during that time. In addition the World Motor Sport Council notes Renault F1’s apology and agrees that the team should pay the costs of the investigation. It also accepts the offer of a significant contribution to the FIA’s safety work. As regards Mr. Briatore, the World Motor Sport Council declares that, for an unlimited period, the FIA does not intend to sanction any International Event, Championship, Cup, Trophy, Challenge or Series involving Mr. Briatore in any capacity whatsoever, or grant any license to any Team or other entity engaging Mr. Briatore in any capacity whatsoever. It also hereby instructs all officials present at FIA-sanctioned events not to permit Mr. Briatore access to any areas under the FIA’s jurisdiction. Furthermore, it does not intend to renew any Superlicence granted to any driver who is associated (through a management contract or otherwise) with Mr. Briatore, or any entity or individual associated with Mr. Briatore. In determining that such instructions should be applicable for an unlimited period, the World Motor Sport Council has had regard not only to the severity of the breach in which Mr. Briatore was complicit but also to his actions in continuing to deny his participation in the breach despite all the evidence. As regards Mr. Symonds, the World Motor Sport Council declares that, for a period of five years, the FIA does not intend to sanction any International Event, Championship, Cup, Trophy, Challenge or Series involving Mr. Symonds in any capacity whatsoever, or grant any license to any Team or other entity engaging Mr. Symonds in any capacity whatsoever. It hereby instructs, for a period of five years, all officials present at FIA-sanctioned events not to permit Mr. Symonds access to any areas under the FIA’s jurisdiction. In determining that such instructions should be effective for a period of five years the World Motor Sport Council has had regard: (i) to Mr. Symonds’ acceptance that he took part in the conspiracy; and (ii) to his communication to the meeting of the World Motor Sport Council that it was to his “eternal regret and shame” that he participated in the conspiracy. As regards Mr. Piquet Jr., the World Motor Sport Council confirms the immunity from individual sanctions under the International Sporting Code in relation to this incident, which the FIA had granted to him in exchange for volunteering his evidence. As regards Fernando Alonso, the World Motor Sport Council thanks him for cooperating with the FIA’s enquiries and for attending the meeting, and concludes that Mr. Alonso was not in any way involved in Renault F1’s breach of the regulations. At an extraordinary meeting of the World Motor Sport Council held in Paris on 21 September 2009, the ING Renault F1 team (“Renault F1”) admitted that the team had conspired with its driver Nelson Piquet Jr. to cause a deliberate crash at the 2008 Singapore Grand Prix, in breach of the International Sporting Code and F1 Sporting Regulations. Renault F1 stated at the meeting that it had conducted a detailed internal investigation, which found that: (i) Flavio Briatore, Pat Symonds and Nelson Piquet Jr. had conspired to cause the crash; and (ii) no other team member was involved in the conspiracy.The FIA has conducted its own detailed investigation and its findings correspond with those of Renault F1. At the meeting of the World Motor Sport Council, Renault F1 made the following points in mitigation: - it had accepted, at the earliest practicable opportunity, that it committed the offences with which it was charged and cooperated fully with the FIA’s investigation; - it had confirmed that Mr. Briatore and Mr. Symonds were involved in the conspiracy and ensured that they left the team; - it apologised unreservedly to the FIA and to the sport for the harm caused by its actions; - it committed to paying the costs incurred by the FIA in its investigation; and - Renault (the parent company, as opposed to Renault F1) committed to making a significant contribution to FIA safety-related projects. Nelson Piquet Jr. also apologised unreservedly to the World Motor Sport Council for his part in the conspiracy. The following decision was taken: The World Motor Sport Council finds that Renault F1 team members Flavio Briatore, Pat Symonds and Nelson Piquet Jr. conspired to cause a deliberate crash at the 2008 Singapore Grand Prix. The World Motor Sport Council therefore finds Renault F1, which, under article 123 of the International Sporting Code, is responsible for the actions of its employees, in breach of Articles 151(c) and point 2(c) of Chapter IV of Appendix L of the Code, and Articles 3.2, 30.3 and/or 39.1 of the Formula One Sporting Regulations. The World Motor Sport Council considers Renault F1’s breaches relating to the 2008 Singapore Grand Prix to be of unparalleled severity. Renault F1’s breaches not only compromised the integrity of the sport but also endangered the lives of spectators, officials, other competitors and Nelson Piquet Jr. himself. The World Motor Sport Council considers that offences of this severity merit permanent disqualification from the FIA Formula One World Championship. However, having regard to the points in mitigation mentioned above and in particular the steps taken by Renault F1 to identify and address the failings within its team and condemn the actions of the individuals involved, the WMSC has decided to suspend Renault F1’s disqualification until the end of the 2011 season. The World Motor Sport Council will only activate this disqualification if Renault F1 is found guilty of a comparable breach during that time. In addition the World Motor Sport Council notes Renault F1’s apology and agrees that the team should pay the costs of the investigation. It also accepts the offer of a significant contribution to the FIA’s safety work. As regards Mr. Briatore, the World Motor Sport Council declares that, for an unlimited period, the FIA does not intend to sanction any International Event, Championship, Cup, Trophy, Challenge or Series involving Mr. Briatore in any capacity whatsoever, or grant any license to any Team or other entity engaging Mr. Briatore in any capacity whatsoever. It also hereby instructs all officials present at FIA-sanctioned events not to permit Mr. Briatore access to any areas under the FIA’s jurisdiction. Furthermore, it does not intend to renew any Superlicence granted to any driver who is associated (through a management contract or otherwise) with Mr. Briatore, or any entity or individual associated with Mr. Briatore. In determining that such instructions should be applicable for an unlimited period, the World Motor Sport Council has had regard not only to the severity of the breach in which Mr. Briatore was complicit but also to his actions in continuing to deny his participation in the breach despite all the evidence. As regards Mr. Symonds, the World Motor Sport Council declares that, for a period of five years, the FIA does not intend to sanction any International Event, Championship, Cup, Trophy, Challenge or Series involving Mr. Symonds in any capacity whatsoever, or grant any license to any Team or other entity engaging Mr. Symonds in any capacity whatsoever. It hereby instructs, for a period of five years, all officials present at FIA-sanctioned events not to permit Mr. Symonds access to any areas under the FIA’s jurisdiction. In determining that such instructions should be effective for a period of five years the World Motor Sport Council has had regard: (i) to Mr. Symonds’ acceptance that he took part in the conspiracy; and (ii) to his communication to the meeting of the World Motor Sport Council that it was to his “eternal regret and shame” that he participated in the conspiracy. As regards Mr. Piquet Jr., the World Motor Sport Council confirms the immunity from individual sanctions under the International Sporting Code in relation to this incident, which the FIA had granted to him in exchange for volunteering his evidence. As regards Fernando Alonso, the World Motor Sport Council thanks him for cooperating with the FIA’s enquiries and for attending the meeting, and concludes that Mr. Alonso was not in any way involved in Renault F1’s breach of the regulations. - Daily Telegraph  Read More →