MBT's housing policies segregates population ? Discuss.

[Brightkid]

I attempt to analyse MBT’s recent housing policy impact into a future time period. In my honest opinion, ultimately over time, it not only divide the country, it actually segregation the population and give PRs a better advantage over citizens here.

Analysis of various groups below :

1. HDB-only owners (citizens & PRs). This group has option to stay within HDB segment and not venture into private property, though if they wanted to, they can. If they do, they will become categorized as in (2) below. Note that PRs can also buy private properties back in their home country without any implications here, in the event they goes back after making enough here, or already still staying outside of Singapore while renting out their HDB here. Best of both worlds for PRs.

All new home buyers, be it first-time citizen buyers or PRs, will likely buy a HDB as their first pty to ensure they hold a HDB and to prevent being stuck in scenario (3) below, thereby pushing HDB price up by their demand of HDB.

With increase in cap from $8K to $10K for DBSS flats, this increased the pool of buyers to compete for HDB apts.

2. Owners of HDB & private ptys. This group consists of citizens and PRs, is expected to hang on to their HDB while continue to invest in private ptys. Hence private ptys will still have demand from this group.

They are not expected to sell their HDB if possible, as once they sell it, they will be re-categorized as private-only group below and cannot buy another HDB without selling ALL their current private ptys. Hence , supply of HDB in resale will drop, possibly supporting a price increase due to demand from influx of PRs. New HDB being launched will have a 5-year MOP and not expected to solve the immediate supply problem make worst by this group holding on to their HDB.

3. Owners of private-only. These group CANNOT buy HDB even if they are citizens without selling off all their private ptys. Citizens are being denied owning a HDB flat. Their focus will be on private ptys for own-stay or investment, or possibly buy ptys in JB to reduce cost-of-living for their retirement. The latter scenario is detrimental to the economy of Singapore.

Based on above, over time, the citizen is likely to be split into 3 pty groups, ie., a private population, a HDB population, and a smaller group that owns both HDB+private ptys.

With each group having its ‘captive’ buyers, and continued influx of PRs, both segments of ptys will continue to increase in price. Seller Stamp Duty will increase selling price as seller will include this cost to it as seen in the implementation earlier this year. Coupled with a minimum reserve price for land release and increase in Development Charge, how is the final selling price expected to fall, given the high cost to developers?

My analysis points to a possibility of not only rise of property prices of HDB and private will not be reined in, it will result in a divided population, with PRs having the best of both worlds. These new policies created a new problem of benefit-differentiation within citizens. This go against the national objective of the past leaders of the country and LHL’s ‘inclusive society’ by segregating the population. Therefore, MBT’s policies seemed like a knee-jerk, plaster-the-wound solution with not enough think-through before implementation, just to please some citizens and the ONLY objective is to recover possible lost votes of younger generations, in time for the coming election. In the long term, the policies may cause the country to be divided into categories of population, does not solve the problem of supply and demand, and the benefits to citizens versus PRs.

There likely be many scenarios that problems may be caused by these policies. Intention of this thread is solely for serious discussion of MBT’s housing policies only. All comments and alternative views are welcomed.

 

[Watchman]

I think this is another smoke screen to appease the masses .

The bottom line for demand still remains .

Loans available to those and those not eligible .

 

[LonewolfAlfa]

I think this is another smoke screen to appease the masses .

The bottom line for demand still remains .

Loans available to those and those not eligible .

not really. its now 10% cash and max 70%loan for 2nd property.

this together with the 3 year SSD will weed out the small time speculators.

 

[garlic]

In my opinion, the 3 groups already exist. The new policies wont alter these 3 groups. The higher cash upfront and lower loans means nothing to the really rich. Really rich group wont care to flip HDBs, flipping condos is still much more profitable. Those affected are those not-so-rich-stay-in-hdb-but-still-want-to-flip (be it hdbs or condos) people. I know for a fact that many property agents are like that. The measures will not make HDBs price fall, but rather will keep it increasing at a decreasing rate compared to previous years. Those who are not that cash rich will have to stop the game and that in a way, is good.

Demand still remains, but now the demand will be lesser, by weeding out those less financially-abled flippers

 

[Watchman]

not really. its now 10% cash and max 70%loan for 2nd property.

this together with the 3 year SSD will weed out the small time speculators.

Is there a cap on the number of properties that one can owned under an individual name ? If not . Back to square ONE .

 

[Brightkid]

In my opinion, the 3 groups already exist. The new policies wont alter these 3 groups. .....................................Demand still remains, but now the demand will be lesser, by weeding out those less financially-abled flippers

No doubt these 3 groups existed before the new measures. However, before that, they can still move between groups without much issue. the new measure put a hard stop to some of the groups from moving to the other groups, such as the private pty owners from buying HDB.

Technically, it is like one is in a castes system, thogh you choose how you wanted to move, subject to the new policies. Once you reaches the 3rd group, you are basically stuck there unless you are prepared to sell off all yuor private ptys and move back to a HDB.

Demand will still be there. For HDB, the reduction from buyers with private ptys will be replaced by PRs (actually helping these PRs to get a better deal ?), while the private pty owners will only play in that segment.

Therefore, beyond the knee-jerk (or election) timeframe, my opinion is that price will continue to rise ('cooling' does not only mean falling price), abeit on a slower gradient.

Is there a cap on the number of properties that one can owned under an individual name ? If not . Back to square ONE .

No cap for private properties. You can buy as many as your bank account desire. Remiser King owns most of units in a condo project with his friend being his ONLY neighbor. Some new launches offer discount for multiple-unit purchase as long as same name is in Option.

 

[scroobal]

Excellent summary.

In my opinion, the 3 groups already exist. The new policies wont alter these 3 groups. The higher cash upfront and lower loans means nothing to the really rich. Really rich group wont care to flip HDBs, flipping condos is still much more profitable. Those affected are those not-so-rich-stay-in-hdb-but-still-want-to-flip (be it hdbs or condos) people. I know for a fact that many property agents are like that. The measures will not make HDBs price fall, but rather will keep it increasing at a decreasing rate compared to previous years. Those who are not that cash rich will have to stop the game and that in a way, is good.

Demand still remains, but now the demand will be lesser, by weeding out those less financially-abled flippers

 

[scroobal]

It might be better that you list what you you are looking for and a second list on the appropriate measures that you think that will get you there. Your analysis is all over the place.

The measures introduced are to cool the market. It was never expected to cause a price reversal. Garlic and lonewolfalfa are right. By the way, your second last para in your second post is identical to what Garlic has already stated.

On the inclusive claim, your analysis seems to be predicated on your aspirations rather than what is reality. There was never an "inclusive" society in the first place and segregation has been rule of thumb way before the influx on FTs. Its was political decision. The country is divided along racial lines which are now institutionalised. Here are the main planks;
1) HDB racial quotas
2) Super schools
3) GRC requiring race fulfillment
4) Self Help organisations like Sinda, Mendaki on racial lines

When you introduce measures to cool the property market, you curtail free movement in terms of entry and exit from the market. That is the intention of such intervention. So the movement between groups are an expected outcome. As to FTs, its obvious that the Government has been treating them as equal to citizens. After much complaining, there has been small and token price and fee differential.

Your point about buying property in JB and having a negative on the economy seems out of place in your analysis.

There has never been cap on private properties anywhere in the world. Why are you looking for a cap for private properties?

ps. I don't think you can call it an analysis. It seems to be random hash of opinions on the 3 groups.

No doubt these 3 groups existed before the new measures. However, before that, they can still move between groups without much issue. the new measure put a hard stop to some of the groups from moving to the other groups, such as the private pty owners from buying HDB.

Technically, it is like one is in a castes system, thogh you choose how you wanted to move, subject to the new policies. Once you reaches the 3rd group, you are basically stuck there unless you are prepared to sell off all yuor private ptys and move back to a HDB.

Demand will still be there. For HDB, the reduction from buyers with private ptys will be replaced by PRs (actually helping these PRs to get a better deal ?), while the private pty owners will only play in that segment.

Therefore, beyond the knee-jerk (or election) timeframe, my opinion is that price will continue to rise ('cooling' does not only mean falling price), abeit on a slower gradient.



No cap for private properties. You can buy as many as your bank account desire. Remiser King owns most of units in a condo project with his friend being his ONLY neighbor. Some new launches offer discount for multiple-unit purchase as long as same name is in Option.

 

[Brightkid]

The measures introduced are to cool the market. It was never expected to cause a price reversal. .

Never did I said the measures are to reverse the price from rising to falling. In fact, I believe prices is expected to continue to increase abeit on a slower gradient.

On the inclusive claim, your analysis seems to be predicated on your aspirations rather than what is reality. .

The inclusive claim or aspirations is by LHL, not me. I don't see it with all the policies implemented.

Your point about buying property in JB and having a negative on the economy seems out of place in your analysis. .

That, imo, may be a spin-off effect of the new measures. This scenario can be seen for example, in China when tight property policies were implemented that leads to an increase outflow of investible funds.

There has never been cap on private properties anywhere in the world. Why are you looking for a cap for private properties?

.

I am not looking for a cap on private properties. That factual statement is in response to Watchman's query.

 

[scroobal]

The measures are to cool the price rise and that was in the speech, and the comments from other forummers as well.

I thought you did an analysis to show something else or something contrary to the claims in the speech such as price will continue to rise unimpeded and the measures would not have the desired results.Why then the analysis?

Could you explain what you meant then. Your slow "gradient comment" only came in your 2nd post after Garlic explained it to you.

Never did I said the measures are to reverse the price from rising to falling. In fact, I believe prices is expected to continue to increase abeit on a slower gradient.