Saturday, 30 June 2007

Money or Memories?

In a strike of the hammer (metaphorically), over 600 residents from Farrer Court, some of whom I know and some who have lamented the loss of their flats, are now going into a mad frenzy to find replacement homes. With each getting over $2m for their ex-HUDC flat, it's no wonder other ex-HUDC estates are now getting very active in forming sales committees, pushing for signature collection, attempting to privatise etc all to cash in the enbloc fever before the temperature abates due to possible worries of bubble bursting and/or government intervention. Some have already said that the recent news that plot ratios will remain largely the same (curbing rampant speculation that the government will increase plot ratios to house the additional 2m influx of migrants, and subsequently boost redevelopment agendas) is an early sign that the governmental panadol is going to cool the enbloc fever.

Add to this, more legalistic confusion arises. One estate that has been collecting signatures and received tenders, found out that they had exceeded their 1 year limit. No names mentioned, but the fact is ALL estates hoping to go down the enbloc road have precisely 1 year from the date of 1st signature on the CSA to acquire the 80% or 90% consensus, and then up to 1 year to submit the application to STB. Given that this estate has received bids, but not reached the 80% required to execute the CSA, and has exceeded the time limit, what happens now? Will the developers' bids be nullified and another round of CSA (which surely must happen) occur, but maybe this time with the RP raised, given that it was a value from a year or even 2 ago? Is this a form of cold feet or active 'resistance' to an unfavourable CSA?

And of course, Horizon Towers (you can read about this in the condosingapore forum) is undergoing a yoyo battle over when the mediation for STB is; current date set would exceed legal deadlines which may cause the enbloc deal to fall through. Heavyweight lawyers are hired and guns are on the ready to go off.

Pearlbank Apartment is under threat again, and with the neighbouring MRT land being redeveloped, there's even more pressure to tear down a modern icon of Singapore's past. You can read the International Herald Tribune piece on Pearlbank here.

Finally, a fantastic piece from Prof Linda Lim of U of Michigan which can be read here. Reflecting on the state of collective sales in Singapore, and the tension between place-based sentimentality and economic and urban renewal justification, she has these to say when her mother's flat was en bloc'd :-

Witnessing my mother's experience made me realise that 'retirement at home' is no longer an option for me.

As an economist and business professor whose thinking is rooted in market logic and financial rationality, I do not always agree with policies and financial actions which may be rational only in a particular institutional and collective cultural context. Singapore's current en bloc fever is a prime example of economic irrationality on all sides.

But regardless of the economic considerations and outcomes, one thing is for sure - the destruction of so many homes not only pollutes the environment and tightens short-term housing supply, but also could cause excess supply and loss of property values in the longer term.

It also destroys the sense of home itself, which is much more than an economic phenomenon. As a friend contemplating an en bloc sale says: 'I am torn. It will make me rich and give me financial freedom...But it will also take away my children's memories.'

Money or memories? Perhaps only a romantic expatriate like myself - with values rooted in the Singapore of the 1960s when we were a new nation, and who has eschewed an economically rational decision when it has meant surrendering the ephemeral identification with home that citizenship brings - will choose memories.

I have met Linda when she was in Singapore June 2006 for an Institute of South East Asian Studies talk titled "Singapore: Place or Nation - The Implications for Economy, State and Identity". If the resistance to enblocs (however small, but still about 10-20% of all who are subjected) is anything to go by, there are some owners (Singaporeans and otherwise) who have a strong affiliation to place and treasure the fact that homes are places of security and places of attachment. Geographyer Tuan Yi Fu said it eloquently, when he points to the difference place has for the young and old:-

Place can acquire deep meaning for the adult through the steady accretion of sentiment over the years. Every piece of heirloom furniture, or even a stain on the wall, tells a story. The child not only has a short past, but his eyes more than the adult's are on the present and the immediate future. His vitality for doing things and exploring space is not suited to the reflective pause and backward glance that make places seem saturated with significance. ... Yet adults, particularly educated adults, have no difficulty associating inanimate objects with moods. Young children, so imaginative in their own spheres of action, may look matter-of-factly on places that to adults are haunted by memories (Tuan 1977: 33)*

Are we a generation of adults or youths, able or unable to understand the significance of place over the 'present and the immediate future'? What is the government saying of citizens when they allow the systematic destruction of places that for many are viewed as homes, and not sound investments? Can any blame be cast on Singaporeans, with little sense of place, if they become 'quitters' and pragmatically choose to emigrate? Memories. I choose that anytime. But in current enbloc atmosphere, I go against the majority and am deemed anti-democratic and anti-Singaporean.

How ironic.

ps. Transcript taking longer than usual. Need to get excerpts transcribed! In the meantime, Enbloc List has been updated. Apologies for the delay.
* Tuan, Y.F. (1977). Space and Place: The Perspective of Experience. Minneapolis: University of Minnesota Press.

[Error on permitted time corrected, with thanks to Pariah's comments]


Anonymous said...

$$2 million. Buy resale $500k-$600k HDB still got $1.4-$1.5mil left for a luxurious retirement.

How many man-years does an above-average, but not high-flying, salaried civil servant (typical HUDC owner) need to save to achieve that amount plus a fully paid up home? Say take salary of $10k per month, total savings of $5k per month (50% of income, which i doubt most Singaporeans can achieve), it would take a minimum of 23 years of savings.

I'll bet on most owners' minds, when the deal went through was;

"HUAT AH!!!!!"

The Pariah said...

For those who can only see and talk $$$, then let's talk $$$.

IF, IF, IF Singapore succeeds in the current re-making, then in the not-too-distant future:

... a bowl of mee siam mai hum in a humble food court may cost $12,

... AND your present location (whether in existing or rebuilt unit) may be worth $12mn (not that far fetched if you remember how much was a Holland Road bungalow in the 1960s and how much shorter present market cycles have become),

... AND a surgery with complications when you are old and means-tested with more than a $1mn assets may require you to cough up $120k (disregarding after-care costs),

... how "huat" you really are!

Anonymous said...

You mean IF IF IF massive inflation?

IF really mee siam $12, HDB $12mil, surgery $120k, you think the above-average civil servant pay will still be $10k per month? With this kind of prices vs wages, you think Govt can still keep their election wards?

If according to your inflation rate, and ppl still earn todays salary, the civil servant wont die; but many many many many others will.

And if the enbloc owners decided to put their $1.4-$1.5mil under the pillow, in their shoes for the next 20 years, they have only themselves to blame. Not asking them to beat inflation, but matching it shouldnt be that big of a challenge.

The Pariah said...

Even at $12, $12mn and $120k, nobody needs to die! Just that everybody has to work until they drop dead (ie, if they manage to order a quickie without the precursor of a long-drawn major illness).

Maybe you reckon Inflation would remain at around present-day levels. I am not a monetarist nor a statistician ... but if one looks around and observes the cusp that the major Developing Countries are now at, the ever-increasing life expectancies in the First World Countries, the ever-depleting and degradation of finite resources on Planet Earth even in the face of impressive strides made in science, technology and medicine, one will be less sanguine ...

The Pariah said...

Dr Minority posted that "... ALL estates ... have precisely 1 year from the date of 1st signature on the CSA to the application to STB. At least, that's how I've read the law; anyone who feels that's not the correct interpretation do let me know".

Under the Strata Titles Boards (STB) Circular 1/2004 - For all CSAs signed on/after 1 May 2004, a 12-month period is accorded to muster the requisite 80% (90%) majority between the date of the first signature to the date of the last signature. On top of that, within 12 months of getting the CSA signed by the requisite majority, the owners have to find a purchaser and apply to STB for a collective sale order.

Hence, by my reading, the window is therefore a 24-month period!!!

IF, IF, IF the predominance of the condo estate is towards an en bloc sale, efforts to cajole, threaten or otherwise pressurize the requisite majority into signing is unlikely to take the full 12 months (more likely 3-6 months or never). Once the requisite majority is hit, nailing down a Developer-Buyer and applying to STB is also unlikely to require another 12 month period (more realistically 1-3 months).

The above are said bearing in mind that en blocs typically ram-up only when the property market starts to heat-up.

That's why I reckon MinLaw need NOT give such generous time windows which only serve to exacerbate the Reserve Price and Market Price mismatch!

Quite commonly, when market conditions are conducive, marketing agents stick their neck out by collapsing the two stages into a concurrent exercise of (A) aggressive marketing of estate based on owners' strong indicative interest followed by (B) seductive price increases and other tactics every other month to lure out the requisite majority.

Under my blog entry of "The Holey Trinity" at: -
there is a lot at stake for the marketing agent if they fail to hit the requisite majority under such concurrent exercises. Imagine what all those en bloc marketing ads cost plus their time? Little wonder that things get ugly and iffy ... there'd be a price to pay when marketing agents stuck their neck out too far out, don't you think?

Dr Minority said...

I have corrected the entry on permitted time (the Circular was quite explicit whereas the Statutes was more ambiguous on this matter).

Anonymous said...

En-bloc = End of the world.