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Second, the subsidies that the government gives when it prices the sale of the land of executive condominiums below market prices does not directly accrue to these households. In reality, the subsidy is directly passed on to the developer who bids for the land and then sells the executive condominiums to buyers at prevailing market rates, earning a profit from the subsidy. Buyers only indirectly benefit from the land subsidy if the prevailing market rates for executive condominiums are substantively lower than the prevailing market rates for normal private condominiums. To put into motion Khaw’s analogy, it is as if the government has built a Lexus and sells the Lexus to the car dealer at a Corolla price. The car dealer is then free to earn any amount of profit above that Corolla price for that Lexus car depending on the market for luxury cars.
- http://ayummysliceoflife.wordpress.com/2013/01/15/whoever-is-in-mnd-is-once-again-out-of-touch/
- http://ayummysliceoflife.wordpress.com/2013/01/15/whoever-is-in-mnd-is-once-again-out-of-touch/
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