Wednesday, 8 August 2007

Property Market Intervention - Reality vs Statistics

Today's Straits Times highlights Ms Lucy Huang's very real predicament of being forced to move home and not being able to find a suitable replacement in the current bullish property market. Her evidence, while anecdotal, is very real and very personal not just to her but many other home owners, particularly owners who are evicted due to enblocs and forced to buy a replacement home in an area they have grown used to, or in a size they need.

I can almost visualise the governmental response: Swanky statistical charts showing 1996 levels relative to 2007 levels which will confirm Mah's statement. Effectively debunking what many on the ground are painfully feeling - the prices of replacement homes, in a community and vicinity they are familiar with, rapidly moving beyond their reach.

In 1995, not far removed from Ms Huang's first eviction, Goh Chok Tong in his National Day speech asserted that "there is no better stake in the country than a flat or a house". Looking at the En-Bloc List I've been tracking from 2006-2007, and considering the increasing likelihood of enblocs going to STB at just marginally above 80% consensus, how many citizens have lost their flats, their stake in the country? (Hint: Thousands.)

Happy National Day, eh.

Straits Times Forum Printed Edition
8 August 2007
Lucy Huang (Ms)

NATIONAL Development Minister Mah Bow Tan said on TV last week that the Government does not need to intervene in the property market yet, because prices have not risen to 1996 levels. I disagree. In that year, we were forced to leave our home because of an en-bloc sale. We spent many months looking for a replacement flat. At that time an HDB executive maisonette in Bishan was going for $650,000; a Lakeview HUDC unit, $800,000; and one at Braddell View, $640,000. A private freehold flat of 1,600 sq feet in Devonshire Road was advertised at $1.05 million while a Cavenagh Court high-floor unit was selling for $750,000.

We are now obliged to find a new home again. HDB five-room flats and executive maisonettes are going for over $750,000; the point blocks near the Farrer Road market, $800,000; Braddell View is now being offered for $1.25 million. Private 99-year-leasehold property like Queens on Commonwealth Avenue are priced at $1.1 million, while prime developments like the one at Orchard Turn opposite Tangs are being booked at over $4,000 per sq ft. All these are way above the 1996 prices.

Thousands are being turned out of their homes because of the en-bloc craze. The money paid to us means either a downgrade or a move to the very borders of Singapore. It is time for government intervention.


12 comments:

Anonymous said...

I have very little sympathy for the "en blockers". If they have signed the CSA, they have agreed to sell, and therefore should not gripe about the whole thing if they cant find a similar apartment near where their property. You cannot have your cake and eat it. IT will be interesting to see whether the letter writer signed the CSA and therefore has to move. For the minority owners, I guess this is just part and parcel of life. The legislature has deemed it that anything less than 20% is the level that should follow the majority voice. Life is not entirely fair, but that is life isn't it?

Anonymous said...

You must be majority people.

DrMinority said...

I'm guessing most people did not read Ms Huang's letter carefully:-

"we were forced to leave our home" & "we are now obliged to find a new home again".

forced and obliged indicate that she did not willingly choose to move out, which means she's very likely someone who is a minority owner.

So she did not "sell in the first place"; she had no choice.

And look at the places she cited - they are in close proximity to where she is staying and prefers to stay.

1. She's not an investor with a secure home, not having to worry about being evicted by an enbloc sale.
2. She's not looking for some place in the outskirts. People form networks and communities around their home and prefer to move close by to maintain such networks. The place she's staying has prices that have shot right past 1996 benchmarks.
3. Is it not wrong for any person, when looking for a new home, to look for one that is about the same size, same location and is new (so it won't be enbloced for at least 10 years)? Given these 3 criteria, I can guarantee you won't find ANY home that match your sale proceeds.

The "part and parcel of life" view is an apathetic view - can't do anything, life's not fair etc. I'm guessing that's the dominant view of any Singaporean - so long as it does not affect them negatively in any way . Why rock the boat right?

Ms Huang doesn't want to remain indifferent or surrender to market forces. Yet she, like others, is too small an entity to do anything. Only the government can, hence her appeal.

Anonymous said...

I am being FORCED to leave MY HOME of 25 years. No one asked me if I wanted to go, they just made up a sales committee with the developer holding about 35% of the shares as the driving force behind the sales committee. Everytime we hit a stalemate in the collection of votes, a mysterious buyer would appear that was willing to buy at their *agreed* sale price. Those owners who were on the sidelines would then sign up.But of course the excuse would be we were too *slow* and the buyers have moved on but the end result would be a spike up in the votes.We should collate all their *tricks*.Would the govt please get a move on and put in the new laws to protect their citizen's home.

Anonymous said...

she's the perfect example of why MND wants more transparency in prices in real estate.. only know how to quote the highest figures..

if she's so naive as to believe all the hype that agents feed her, then she deserves everything that she's experiencing right now..

Anonymous said...

i'm sorry but singapore shouldnt grind to a halt just because a 20% minority thinks he/she's so damn impt.. YOU R NOT! progress for the 80% is way more impt..

and to those who are still waiting for SOMEBODY ELSE to fight their war for them, i say to YOU! YOU! deserve everything that is coming to you.. yes that includes losing your home..

ghost said...

>>i'm sorry but singapore shouldnt grind to a halt just because a 20% minority thinks he/she's so damn impt.. YOU R NOT! progress for the 80% is way more impt..<<

You are absolutely right.. Singapore should get rid of minority since the 80% majority is much more important.

So by your logic, since majority so important, I think government should listen to you and change en block law to 100% majority required. No more minority.

Simple. All any sale committee need to do is make sure they have 100% signature. Problem solved.

And before you think this is stupid... Hong Kong does this for their en bloc. No 80% rubbish.

Anonymous said...

I have read the Mrs Huang's note before posting the first comment. And I fully understand the meaning of "forced" and "obliged". It is highly likely that she she did not sign the CSA and therefore "forced" to move. It is also possible that she signed the CSA and and therefore now "forced" and "obliged" to move. No?

That is not what I am driving at. For progress and rejuvenation, one has to subject oneself to societal norms. The minority should follow with the majority. You please most people most of the time, but you cant please all people all the time. It is as simple as that.

There is a very simple solution to all this. If one is unhappy and does not one to subject oneself to "society" pressure/norms/whatever, one should buy an island. Thereafter, that person can do what he/she likes. But to us, that is not a viable alternative. And therefore, we follow the majority's decision. And I am not just talking about en-bloc. I am referring to all aspects of "being" in our world in order to achieve equilibrium. And the Legislature has deemed it 80% as the acceptable level of majority voice. There is no science to it. We all know that 100% is not viable. And therefore, my comments --- "accept it and move on with life" is directed at that. That is not apathy. That is being practical, and realisation of my place in this world.

Anonymous said...

"And before you think this is stupid... Hong Kong does this for their en bloc. No 80% rubbish. "

in hongkong, this will be settled by the triads!!

Dr Minority said...

>>I have read the Mrs Huang's note before posting the first comment. And I fully understand the meaning of "forced" and "obliged". It is highly likely that she she did not sign the CSA and therefore "forced" to move. It is also possible that she signed the CSA and and therefore now "forced" and "obliged" to move. No?<<

There are many readings to a text. Including the possible reading that Ms Huang's letter is fabricated. If we assume that everything she wrote is truthful, then while what you said is true as well, the dominant reading (as reflected in your stronger modal "highly likely" vs a weaker one "possible") has to be that she is moving against the wishes of the majority and subsequently the completed sale.

You have raised very valid points on societal norms vis-a-vis individual rights. I want to address these as they are right at the heart of a collective sale (yes, greed isn't, but that of social good vs individual rights), but it'll take a full post to do so rather than a comment. Many thanks for your contribution :)

FYI, the Hong Kong model of urban renewal is far more draconian. Yes, 100% majority is needed because the Urban Renewal Agency (URA), a government body, takes away the land without consent from the owners, pay them market rates, and then sells the land to developers who redevelops it to a higher density, more expensive area.

Urban redevelopment without a choice. Their rhetoric centres around the same impetus for urben redevelopment in Singapore - social good.

Anonymous said...

"Yes, 100% majority is needed because the Urban Renewal Agency (URA), a government body, takes away the land without consent from the owners, pay them market rates, and then sells the land to developers who redevelops it to a higher density, more expensive area.

Urban redevelopment without a choice. "

wah u totally lost me here doctor.. first u say 100% required, den u say just take their land, pay market rate is a redevelopment without a choice.. which is it!?!?!?

100% majority is not a vote meh!??

Anonymous said...

"100% majority is not a vote meh!?? "

you must have missed my post. in HK this 100% will be settled by the TRIADS!!!

in "democratic" Iraq under saddam hussien, saddam also get 100% votes, elections settled by saddams "SS"