Goverment still say not enough workers and foreign residents in Singapore

[Watchman]

8,967 applications for 1,429 flats at Punggol Emerald and Punggold Waves
May 4th, 2010 | Author: Your Correspondent

In another sign that the present number of new flats built by HDB is grossly inadequate to meet existing demand, HDB has received 8,967 applications for 1,429 flats at Punggol Emerald and Punggold Waves or more than 6 times oversubscribed.

The figure rises to seven bidder for one flat for 4 room flats, or 4,648 applications for 609 flats on offer.

The current shortage of flats has led to sky-rocketing prices which are pricing ordinary Singaporeans, especially young couples out of the public housing market.

It is a result of lack of foresight by HDB to build more flats to meet the expected increased in demand for housing fueled by mass immigration.

The ruling party had made known its ambitious plan to increase Singapore’s population to 6.5 million via immigration as early as 2005.

However, only slightly more than 11,000 new flats were built between the years 2006 – 2008 when there were over 90,000 PRs and 20,000 new citizens alone in 2008:

[Source: HDB Financial Report 2008/2009]

Below is a graph illustrating how the rise in the prices of resale flats coincides with the rise in the number of foreigners in Singapore between the years 2000 and 2008, courtesy of Kojakbt, the moderator of 3in1kopitiam:

Due to the ruling party’s liberal immigration policy, foreigners now made up 36 per cent of Singapore’s population, up from 14 per cent in 1990.

The influx of PRs also contribute to a spike in the prices of resale flats as they have higher spending prowess and are willing to spend more.

The Straits Times reported a Taiwanese couple paying a record $650,000 for a four room flat in Bras Basah lately. Another Indonesian PR forked out $653,000 for a 4 room flat in Queenstown.

With an increasing number of Singaporeans unable to afford resale flats, they have no choice but to turn to BTO flats thereby spiking up the demand.

Despite evidence showing otherwise, National Development Minister Mah Bow Tan is adamant that HDB flats remain “affordable” to Singaporeans and chided home buyers for being “fussy” and having “unrealistic” expectations.

 

[ChaoPappyPoodle]

Years ago, before the prices of new flats were pegged to those of resale flats, the PAP effectively created a floor price for housing in Singapore. With HDB flats effectively used as a floor price, all other housing were priced higher than HDB flats.

While these prices were low the impact on home buyers was not so great; housing was still truly affordable and homes could be fully paid for in 10 or at most 15 years.

What Floor Price theory dictates is that soon a surplus of homes will be put out in the market by private developers. This is theory that is immovable. Private developers could earn supernormal profits as their prices could always be above HDB prices and people would still demand for private homes. As expected, a surplus of private homes is created and yet prices are still above HDB prices, the floor price.

As years went by the HDB started pegging the prices of new flats as a percentage of resales flats. As if things wern't silly enough with a floor price, this single act would inevitably increase home prices astronomically almost overnight.

What this single act did was to create a cycle of ever increasing home prices. Private developers will always price above the floor price and as the floodgates to foreigners oppened up to allow them to purchase homes here, it was inevitable that even HDB resales prices would increase as a result. This is to be expected even without foreigners as Singaporeans would not sell their private homes below HDBs floor prices.

In short, HDB's policies created a situation where home prices will continually increase at a rate which cannot be supported by wage increases which are tied to global shifts. Our home policies are very much centered on local conditions, floor pricing created by HDB and the number of new flats created by HDB.

As HDB resale prices increased so do prices of new HDB flats. This cycle is vicious and will continue for as long as the government pegs prices of new flats to those of resale flats. With an ever increasing FT populatin and local population, home prices can only go sjyward. Even is a worldwide recessin, as long as FTs are allowed to come in, home prices will continue to increase.

This model of pricing new flats to resales flats will in a short time create a scenario where a large number of Singaporeans will be priced out of the home ownership market.

The HDB model of pricing relies heavily on the use of CPF to make mortgage payments and this inevitably destroys the pensions of Singaporeans.
Add to this the fact that PAP ministers have their salaries pegged to GDP and you can again see why the PAP government has no incentive at all to correct this problem.

Singaporeans must be told of the disastrous path where the PAP has put them onto. Singaporeans must realise that this path evenif good in the short term, will lead to a situation where their own children will not be able to afford their own homes and they themseves may not have sufficient funds for retirement.

Singaporeans must realise that someone has to do something and that the PAP is the last group of people to want to do anything about it.

Singaporeans have to decide how serious this situatin is today and that things will get worse very fast as the influx of FTs has exacerbated the problem exponentially.

Singaporeans have to vote for their future and those of their children. All we need is to vote out 44+ PAP ministers in the next election. The civil service will still function as per normal. The major difference is that policies will now be more centered towards the needs and wants of the population instead of a group of men.

Vote for Change
Merdeka from PAP
Merdeka for Singapore

 

[besotted]

Kill two birds with one stone

More FT to dilute Singaporean bad attitude and to raise asset prices

DAMN GOOD policy I say