Singapore Self-Inflicted Inflation

The Straits Time on Friday 27 April published an Insight Article on "Made in Singapore" Inflation which hit 5.2 percent last year!

Notable phrases in the article included :

• Trader Leon Tham, 29, who is based in New York and back here for a visit says," The cost of a car here is astronomical compared to that in the United States. And the price of a condo in Singapore might soon be more expensive than a similar one in New York. It is becomming very unaffordable even by global standards."
• Ang Mo Kio GRC MP Mr Singh says " the Government has responsibility here, because the demand and supply imbalance was caused by planning issues." He adds : This was created internally because of our rapid population increase. So in housing, or transport, the pressure is to be expected."
• What has caused the change? One factor is monetary policy in Western developed countries. They are keeping interest rates near zero in order to boost their anaemic economies, causing a raft of foreign money to flow to this part of the world and pushing asset prices, especially in the property market.
• Similarly for cars. To fight congestion, a decision has been taken to reduce the annual rate of growth of the vehicle population from 1.5 per cent to 0.5 per cent from August. That could see COE prices already at a 20 year high soar past $100,000 in the next few months, warns Dr Chua.

Even anecdotal experience shows that actual inflation is more than 5.2 percent. Manual Car Wash has increased from $6 to $8 ! 33% increase! Even a bowl of mango sago dessert is now $4! compared to $3 previously!

Mr Singh says "The Governement knows what to do to make things comfortable. Unfortunately it cannot happen overnight."

Well here are some solutions that will immediately slow inflation down.

1. Mandate that only Singaporean citizens are entitled to purchase COEs and they cannot be resold to PR or Foreigners. PRs and Foreigner can rent or take taxis or public transport.
2. Mandate that new launches of Private Housing can be sold to all, but all resale Private Housing must be sold to Singaporeans. Make the PRs and Foreigners rent from Singaporeans.
3. All foriegn capital influx must be taxed at 15% interest rates when put into Singapore banks or financial institutions, a corresponding increase in deposit rates for Singapore Citizens will then apply.

These measures will put money directly into the pockets of Singaporeans. All the useless COE and 10% additional buyers stamp duty for foreigners just put money into the Govt coffers! So that they have so much $$$ to give US$ 5 bln of Singaporean's money to IMF.

There are at least 18,000 unsold private condos in Singapore! Are we breeding "ghosts"?

I was totally shocked when I read through this report from Kim Eng on the state of the unsold private condos in Singapore. They have analyzed the data from HDB and URA websites and have put it in an easy to read categorized listing of the property developers land bank. Given some of the projects are due for launch and that property players play the game of releasing units in phases, but still 18,000 empty condos!???!

The government needs to put a firm stand on the release of these units and set a time line, e.g. 1 years after TOP, the units must be sold or put up for auction...it is ridiculous that so many empty units are housing "ghosts" when marriagable couples who can procreate SINGAPOREANS struggle to find a nest.

This country is importing foreigners and breeding "ghosts"!

Demise of the Singapore Dream 5Cs - The debate revisited

Reading this blog post from another blogger http://utwt.blogspot.com/2012/03/pap-finally-comes-to-its-senses.html  caused me to re-visit the discussion about the Singapore Dream which was coined in the 1990s. Namely, Cash, Car, Credit card, Condominium and Country club membership.
http://en.wikipedia.org/wiki/5_C's_of_Singapore


Let's first start with Cash : In fact, let's put this to the last topic and you will see why.


Car : Unless you have been living under the sea, you will realise that the price of Cars in Singapore has escalated to a ridiculous level. http://www.onemotoring.com.sg/publish/onemotoring/en.html COE's right now are at S$82,000 for cars with a capacity about 1,600cc. For that price of the paper issued by the govt, you can buy TWO or THREE cars in Australia ! http://www.toyota.com.au/


Credit Cards : This used to be an indication of your earning power and ability to hold a credit card. No more! Lots of banks now offer pseudo-Credit Cards that require no minimum income, just have the money in the bank. For example HSBC Secured Visa Credit Card, http://www.hsbc.com.sg/1/2/personal/cards/hsbc-secured-visa-card. In any case, I never felt that this was a worthly matric for the Singapore Dream.


Condominium : Here is the big key item in the Singapore psyche, the key measure and determination that you studied hard, worked hard, you will buy a government HDB flat and then eventually upgrade to private property status. That is no longer the formula to success in Singapore property. Condo prices in Singapore are above S$1,000 per square ft and the soon to be lauched in Bishan Sky habitat is slated to be sold at S$1,600 to S$1,700 per square ft http://www.propwise.sg/wp-content/uploads/Figure2.jpg.
Assuming a 1000 square ft apartment, that will cost S$ 1,700,000. With the median household income of
S$ 7,040 (2011 numbers) and rule of 1/3 of salary to be spent on housing. It will take 60 years to repay back the loan! (not even including interest!) Even with all the Additional Buyer’s Stamp Duty (ABSD), the private property prices are still ludicrous in Singapore!


Country club membership : This was another indication of making it in Singapore, with the opportunity to visit the country club with the family and have a game of golf during the weekend. The membership fees for these have also increased over the years, though not at a pace of housing and cars. The most expensive being where the top elites of Singapore pay, Singapore Island Country Club at more than S$ 200,000 http://www.bestgolf.com.sg/prices2.asp


Cash : So with all the large-ticket items above, do we have any cash??

The Demise of the Singapore dream, is not new, it has been succintly described in a New York Times Article in June 1996http://www.nytimes.com/1996/06/05/world/singapore-journal-good-life-guide-to-5-c-s-like-cash-add-clout.html?pagewanted=all&src=pm

"In paternalistic Singapore, we are told, 'Just listen to us and keep your nose clean and everything will be all right,' " said a professional woman in her early 30's who asked not to be identified.

"I studied, I got my degree, I got a good job," she said. "I did everything right, and it looks like I'll be living with my mother the rest of my life. I didn't make any eccentric choices; I didn't go into the arts or anything like that, and where's the payoff?"

In a plaint that is widely quoted here, Phua Mei Pin, a 19-year-old intern at The Straits Times, which generally presents the Government line, wrote in the newspaper last week of her generation's increasing disillusionment.

"I am not asking for an emperor's condos and stables of Benzes, just a small place I can belong to and that can belong to me," she wrote. "Already I have friends who are drawing up blueprints of their futures in Australia and America, where they believe they can stretch the same dollar much further."

In fact, the 5Cs as traditionally known in Singapore has been replaced by the following :-

Crush : As of 2011, the population of Singapore is 5.18 million people, of whom 3.25 million (63%) are citizens while the rest (37%) are permanent residents or foreign workers. Twenty-three percent of Singaporean citizens were born outside Singapore i.e. foreign born citizens. There are half a million permanent residents in Singapore in 2011. The infrastructure in Singapore is unable to cope with the sudden and uncomfortable influx.
Casino : Two integrated resorts here in Singapore with the intend to bring in foreign money has also the dark side of more and more Singaporeans getting into the addiction of gambling to revive the Singapore Dream.

Complaints : Related housing, transport cock-ups, taxi fare hikes, senior citizen facilities non-ideal location...the complaints go on and on.

Cock-ups : SMRT Train disruptions, Flash flooding in Orchard Road, Senior officials from the public sector dismissed etc.... Having pride ourselves that Singapore is a place that is efficient and clean, and where things get done, the series of boo-boos have been very embarrassing.

Change : At the end of the day, even if the Singapore Dream is not attainable by everyone in Singapore, there must be a hope eternal that it can be attained. When that Dream is no longer perceived to be achievable, then pragmatic Singaporeans will force a CHANGE to enable that Dream to be revived.

The Goldman Sachs Muppets song: Client or Muppet? - Felix TV

Very funny and hilarious video...

Goldman Sachs - resignation letter published in the New York Times

http://www.dailymail.co.uk/news/article-2114829/Greg-Smith-resignation-letter-Goldman-Sachs-exec-quits-firms-toxic-culture.html

Any resemblance to GoldMAN Sicks ???

Goldman Sachs - resignation letter published in the New York Times.

TRUST NO ONE with your $$$,

especially Bankers.

Credit Cards Annual Fee - Waiver via Telephone

[Commentary : Credit Card companies are getting a little smarter with regard to Credit Card annual fees. Now with DBS and ANZ, basically all you need to do is to get the waiver done over the phone instead of waiting for 15 mins on the phone to speak to someone. On the other hand, I have never used a HSBC credit card nor apply for one after they refused to waive the annual fee. I cut the credit card and sent it back to them. Annual Fees are arcane and banks should just do away with them all together, they make enough money from the 2% commission charges that they charge the merchant and the rental fees for the credit card machine. Guess who picks up the bill already for these charges? YOU DO!

So remember to check your credit card statement and make sure they don't double dip their greedy fingers twice into the honey pot.]

Property : Top bid of S$532psf ppr for Bedok South Ave 3 site

Property: Top bid of S$532psf ppr for Bedok South Ave 3 site. A consortium comprising Far East

Organisation's F.E. Lakeside, Frasers Centrepoint's FCL Topaz and Sekisui House Singapore submitted the top bid of S$345.9m or S$534.22psf ppr for a 99-year leasehold plot at Bedok South Avenue. The site has a maximum gross floor area of about 647,491sf, yielding an estimated 600 units comprising a mix of one- to four-bedroom apartments.

(Source: The Business Times)

UOB Kay Hian Comments: The measured seven bids for the site despite jittery market conditions is indicative of developers’ view that although prices are likely to moderate by 10-15%, demand is likely to sustain. We expect the breakeven price for the site at S$850-900psf and selling prices at above S$1,050psf. The bid is reasonable in our view considering nearby Optima @ Tanah Merah is selling in the subsale market at S$1,000-1,100psf. Bedok Residences, a hot new launch located above the Bedok MRT (one MRT away), is currently selling at a 20% premium to our price assumptions.

[Blog commentary] The bid price of S$532psf ppr is reasonable, but having the final selling price of S$1000+ psf still seems high for a OCR condo. We need a cold chill wind to bring the prices back to sanity  <S$1000 psf for heartland condos.