Three months ago, a colleague had to downgrade from his pride-of-joy condominium possession to a humbler HDB abode. After a life time of work, he was back where most Singaporeans started off with, a pigeon hole in the sky. The story is familiar, he had to finance his son's overseas education, the limited places in the local university are still being parcelled out to foreigners, some on gratis basis.
He sold at his asking price. The surprise was when he bought without having to shell out for cash over valuation (COV). The eager seller even allowed a further discount. Turns out chap had committed on a town house, and was in hurry for available cash. One man's folly is another man's fortune.
The mainstream media has confirmed the trend. Average application rate for BTO flats has declined from 5.3 in 2010 to 2.9 this year. BTO application rate for second timers was 2.4, way down from 25.9 in November 2011. Well done, Mr Khaw, who wrote, "We have cleared the backlog young families buying their first flats." Why then, is the Minister for National Development planning to slow down the supply of flats from next year?
Earlier in June, Khaw cited excuses claiming the increase of supply was "not sustainable", and it could slow down after 2015 to prevent a glut in the market. And they still maintain a 6.9 million population is "sustainable", with all the invasive glut from the foreign crowd. Plus, the Senior Fellow at the Singapore Institute of International Affairs and Adjunct Professor at the Lee Kuan Yew School of Public Policy even suggested Singapore can fit 8 million people. Whatever Dr Parag Khanna is smoking, has to be good hash.
This has to be a re-hash of the asset enhancement Kool-Aid dispensation. This is how the old man still sees it:
"But Singaporeans have also made great gains from their properties. If they believe property is overpriced and that prices will eventually go down, the option of cashing out is available to them. You can sell your house, rent in the interim and wait for prices to fall. If you believe prices are going to stay up, then you hold on to it. It is ultimately a question of confidence in a particular country or in the political system that is is run on."
("One Man's View", circa 2013, page 271)
That's easy to say for someone with a bungalow (or two), couple of condominium units bought at special discount from friends in property development, and millions in the bank to spare. The average lesser mortal has only options to move down, and in extreme cases, to the tent city at Changi beach or the void deck. BTW, that colleague is hoping his son will graduate, get a job, secure a Green Card, and hopefully ship the whole family over. Now that's "confidence in a particular country".
Tattler
*The writer blogs at http://singaporedesk.blogspot.com/