TR EMERITUS

From our Correspondent From tea-parties to walk-and-jog, the government is sparing no efforts to help make new citizens and PRs feel welcomed in Singapore. The latest fad is HDB floor parties which is catching on among grassroots organizations to promote interaction between Singaporeans, especially with the newcomers. (read report here) There has been a steady increase in the number of such parties, organised by residents' committees, with more than 2,000 held in the last two years involving around 80,000 residents, said the People's Association (PA). One of the parties, organized by Canberra Zone 4 Residents' Committee was attended by software engineer Thangamuthu Muthukalai, a permanent resident from India. He admitted that this is the first time he had the chance to interact with his neighbors after he moved in last year. PRs are permitted to purchase HDB resale flats, subsidized public housing meant initially only for Singapore citizens. The rise in the number of PRs in recent years had increased the demand for HDB flats, thereby pushing up the prices. There are few restrictions on PRs buying HDB flats. With the exception of the grant given by HDB, they are subjected to the same conditions imposed on Singaporeans such as the minimum 5-year residency period before they can sell the flat. PRs can buy HDB flats at any time during their residency in Singapore. However, there are concerns that some may profit from their flats by selling them after 5 years should they decide to leave Singapore. As PRs are usually skilled or semi-skilled professionals earning a decent wage, most can afford the relatively high prices of resale flats. Singaporeans, especially young couples, are becoming increasing squeezed by the ballooning cost of housing. Pleas from Singaporeans to the government to reduce housing prices have fallen on deaf ears. The official stance is that both new and resale HDB flats remain affordable to Singaporeans based on an international benchmark for housing affordability. The government had issued repeated exhortations to Singaporeans to embrace foreigners. As part of Singapore's 44th National Day celebrations, an "amazing race" was organized by the grassroots organizations solely for new citizens. A PAP MP Charles Chong once remarked that foreigners are easily "contented" unlike Singaporeans who "complained too much". It is unsure if the government's pro-foreigner policy is taking fruit. Though there are record number of foreigners in Singapore, it is not known how many of the PRs have taken up Singapore citizenship which offers few additional benefits other than slightly lower charges for medical bills, higher housing subsidies, the priviledge of future generations to serve National Service and the right to vote. Singapore is due to hold its next elections soon. In the 2006 elections, almost half the population did not get to vote due to walkovers. The ruling PAP has been in control of the government for 50 continuous years since 1959, a feat matched only by the Liberal Democratic Party of Japan which was ousted from power only a week ago. Related articles: >> MM Lee defends need for foreign talent >> PRC student supports government’s plan for more foreign scholars >> PAP organizes ‘amazing race’ for PRs  Read More →

By Abdul Gafoor, Social Correspondent Many Singaporeans have grown to agree and accept that the housing market in Singapore is in a crisis. In a country of 600 sq km, where rental property is not quite an affordable option for majority of locals, purchasing a property has become not just desirable but a must. Therefore this begs a close view of the macro factors that are behind the housing market crisis in Singapore Wrong supply curve provided by the government One of the main factors for the housing crisis in Singapore is the large number of buyers who have very poor purchasing capacity and are totally reliant on government for subsidy grants and subsidized loans. If the government is to stop all subsidy grants and loans, the housing crisis will be doubly worse. That is why the government’s definition of affordability does not match that of the people. What the government needs to do is to supply houses at the volumes and price levels at which people can buy without relying on subsidy grants and subsidized loans, which is the natural purchasing power rate of people and which is the real demand level. Subsidy grants and subsidized loans do not improve affordability Another chief factor that has brought the housing market into the crisis is the subsidy grants and subsidized loans. What the government is trying to do is to create a superficial sense of affordability with the subsidized loans and grants but that actually erodes the affordability for all the rest as illustrated below. A person on $5,000 income and $4, 000 take home income, probably has a maximum capacity to pay $2,000 mortgage using CPF and cash. However he may not have the means to pay $50K deposit for a $500K house, especially if he is only having worked for a few years. But with a subsidy grant, he can afford the deposit and hence the house. In fact he may actually not afford $2,000 mortgage given high cost of living in Singapore where he needs money for other household expenses. But with a subsidized loan, he can afford it. As a house seller, knowing that the buyer can afford $500K with all the subsidy grant and loan, why should I ask for a price of $400K. I can push it up to $500K. Other house sellers (being Singapore) will follow suit and the buyer will have to offer me around there. After the first few buyers, HDB will push up valuation to $500K. This impact of subsidy grants and subsidized loans pushing up prices and reducing affordability has been true not just in Singapore but every city around the world (though there are very few because other governments know this better as they are more wise). Poor management skills: using rigid rules to achieve noble outcomes The government may have been excellent as a third world country but it totally lacks the skills for a first world country. Its lack of management skills is another main factor behind the housing market crisis. There are many noble outcomes that the government hopes to achieve with its million rules for the housing market. However the means that it uses which is the rules are too rigid, inflexible for a housing market that is so dynamic in terms of socio-economic factors and demographics. Firstly the government uses the "kiasu" approach to rule making which is creating barriers instead of opportunities. For instance in the issue of creating 3 room housing for lower income, an opportunity based approach will involve identifying which applicants require help and could only afford 3 rooms. Instead they use the rule based approach which basically set outs rules that prevent certain families from qualifying but a good proportion of those families genuinely can require that help to get 3 rooms. What has become so clear is that the government rarely achieves its desired outcomes with its rigid rules. Conflicting objectives: profit maximization and affordable prices Another key reason  why the housing market in Singapore is in a crisis the conflicting objectives of the government. When PAP’s public housing program started off in the 1960s, it was chiefly provision of affordable housing. However in recent two decades, it also has adopted the objective of maximizing profits. It does not take too much arguments for one to realize that these two are contradicting and conflicting objectives. The government can only have one, not both. Indeed today we see the government making a handsome amount of money in public housing whereas prices are no longer affordable. The sacrifice of the objective of profit maximization is a fair one. Firstly it does not mean the government will be loss running in providing public housing. Secondly the government can gain in so many other ways if its population can comfortably live in affordable housing. Addendum by editor: [It was announced lately that BBR Holdings has secured a S$104.2-million contract from the Housing & Development Board (HDB) to build seven blocks of flats in Yishun Neighbourhood 4. The work comprises 864 homes, a Child Care Centre, a roof garden, communal amenities and site works, as well as contingency works. (Channel News Asia, 17 August 2009) Financial Consultant Mr Leong Sze Hian calculated that HDB may make a profit of more than $170,000 for each flat sold upon completion: "Since there will be 864 HDB flats, the average cost per flat, inclusive of communal amenities, site works and contingency works, is about $120,602 ($104.2 million divided by 864 flats). With the latest HDB new 4-room flats at Punggol (Punggol Residences BTO) selling at an average price of $293,000 (price range of $264,000 to $322,000 divided by 2), does it mean that the HDB stands to make a profit of about $172,398 per flat, or a profit margin of about 143 per cent?"] [Source: Hardwarezone] About the Author: Abdul Gafoor is a young married researcher working in UK after leaving Singapore . He hopes to return someday to the Singapore he knew as a teenager. Related articles: >> Drawbacks of using STIR as a bench mark to assess housing affordability >> HDB flats will be “severely unaffordable using the Median Multiple as a benchmark for housing affordability” >> Part 1: Singaporeans do not own their HDB flats >> Part 2: HDB flats are unaffordable to most Singaporeans >> Part 3: Rising prices of HDB flats does not create wealth EDITORS’ NOTE: If you like our work and would like to support us, please transfer your donations via paypal to our account ([email protected]). Any amount will be greatly appreciated! Alternatively, you can also help boost our advertising revenue by clicking on the ads displayed. Thank you! Join our tweet at: http://www.twitter.com/temasekreview and facebook at www.facebook.com (search for “Temasek Review”)  Read More →

From our Correspondent The Temasek Review team has decided to launch a long-term social welfare programme under its auspices named "Project Kasih" to help those elderly who needs to scavenge for used cardboards, papers and cans in the streets for a living. "Kasih" means "Compassion" in the Malay language. Our elderly have dedicated their entire lives to contribute to the building of modern Singapore. It is a national shame that they don't even have a shelter over their heads and three basic meals a day in their twilight years. Over the years, these street scavengers have become ubiquitous in every corner of Singapore. They are non-existent 10 to 20 years ago! Regardless of the reasons behind their current predicament, they deserve to be treated better! Photo Gallery of elderly street scavengers in Singapore: [imagebrowser id=49] As fellow Singaporeans, we cannot stand idly by doing nothing and watch these old folks suffer in silence. Let's give them a helping hand to make life more bearable for them in whatever ways we can. After we publish the AFP video on the plight of Madam Zheng, a 76 year old street scavenger, we received many emails from readers and NGOs offering their help to Madam Zheng. Unfortunately we do not know where to find her and therefore have to make an open appeal on our site. This heartening response has convinced us we can and should do much more to help other street scavengers like Madam Zheng. Of course we cannot do it on our own and we need as much help we can from you, our readers. Our proposal is very simple at the moment: 1. Compile a registry of street scavengers: We need our readers to be our "eyes and ears" on the ground. If you come across any street scavenger, homeless elderly sleeping in HDB void decks or any neglected elderly in financial distress, please email us their location at [email protected] If you have the time, talk to them and find out the following: age, (do they own a) home, number of children (and if they give them money), medical conditions, and daily income (sufficient for 3 meals?). This will help us vet the case and determine if the elderly needs any help and if so, what type of help. 2. We will contact a volunteer from an appropriate NGO (quite a few have already established contact with us) to make a trip in person and find out more about his/her family background and assess if he/she qualifies for a sheltered or nursing home. 3. If the elderly has a home already, does not qualify for a nursing/sheltered home or is unwilling to live there, we will provide him/her with a monthly allowance of $30 for a start which will gradually be increased in the future as the site rakes in more advertising revenue. Though it may not amount to much, it will at least help reduce his/her workload. Please take note that for the sake of transparency, we will need to publish the name and email of the reader who found the elderly on our site. 4. At the same time, we will publish where these elderly can be found (at work) on our site so that well-wishers can drop by and pass them food or cash from time to time. However, their personal details will be kept strictly confidential. [We have over 5,000 readers from Singapore a day. We can do something more to help these elderly as a group, can we?] 5. We will try to keep in touch with these elderly on our registry at least once a month to make sure they are coping well. Imagine if one day we are old, we end up in the streets picking cardboards for a living alone by ourselves completely ignored by the younger generation of Singaporeans, how would we feel? Are we still one united people and nation? Do we really care about the less fortunate people around us? We are looking for social workers and volunteers to participate in this project. We will fund it entirely from our own pockets as of now. Due to our heavy committment to develop this site, we hope this project can be run eventually by a dedicated team autonomously on its own while we continue to give it financial support. If you have any suggestions or are interested to join us, please drop us an email at: [email protected] NGOs and VWOs who wish to participate in this project, please contact us as well.  Read More →