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A Bulge in the Pipeline or How to Create A Housing Bubble

011: Why cooling measures and subsidies offer no solutions to rising prices and declining fertility


The question I’m most asked by Journalists is, “What are the issues this coming election?” The answer I most often give is that they haven’t changed that much from the previous election. There is really only one key issue this coming election. It is housing, it is immigration, and it is the cost of living. They are one because they are all part of the same.

When you take a closer look at supply and demand as it relates to HDB housing it becomes clearer that the issues remain the same because the government is a behemoth incapable of reacting fast enough to changing circumstances that it is itself responsible for.  An analogy might be a brontosaurus with several primitive brains in different parts of the body so that there is no central coordination. Immigration and housing are specifically two sides of the same coin. In its simplest form we have too many people and not enough housing.* According to Singapore in Figures 2010 ** the stock of HDB flats rose by only about 11,000 units between 2004 and 2009. At the same time the Singapore resident population rose by 461,000 between 2000 and 2009 and the total population rose by nearly a million.

Another journalist asked me for my opinion on the statistic, widely disseminated around the web, that 85% of Singaporeans own HDB housing. That figure originated with a senior civil servant responding to The Reform Party’s proposals for easing our HDB woes. Crucially it was that 85% live in HDB housing not own it. I re-educated that journalist who corrected the mistake but the wider public don’t make the distinction and a myth is peddled.

At this moment the resources are not available for me to calculate the exact statistic but the number of HDB managed units at end 2009 was 888,143. If we divide this by a resident population of 3.7 million this comes down to roughly 25% ownership.  Then you need to factor in children and joint ownership and we don’t know what the actual percentage of that 888,000 is rental. The actual ownership percentage is probably below 50% of adults. So the majority of Singaporeans would benefit from lower prices as it would enable them to gain a foothold on the property market or move to a bigger property.

However falling property prices can have serious consequences for the economy if they lead to curtailed consumption and negative equity.  We therefore need to be cautious about the release of new land and new building so as not to cause too rapid an adjustment.

So who is responsible for the high prices that the government is failing to cool? Well, the government is directly responsible. The government is the owner of the bulk of the country’s land and could therefore be said to have a vested interest in keeping prices high and rising. The government is also the owner of the HDB and furthermore through CPF it is the provider of the bulk of the nation’s housing finance. The HDB is directly responsible for not having coordinated its policies with the other government ministries responsible for immigration. It has been too slow to react to the imbalance in supply. It is not as though they could claim that it is an honest mistake and they could not see it coming. They only need to wait for a bus or attempt to get on an MRT as I do every day, to see how crowded we are!

This imbalance between demand and supply has been exacerbated by the government’s previous decision to allow 100% of CPF ordinary account balances to be used for housing together with the provision of subsidies in the form of the Housing Grant and the Additional Housing Grant. In August 2010 the government announced a number of cooling measures for the property market.  They could not however, resist extending the Housing Grant to buyers of DBSS and EC who have a monthly income of up to $10,000PM. In the longer term as well as reviewing some of the subsidies to housing we should seek to reform CPF and give people more choice over their savings.

It is difficult to believe that the government’s policy architects could demonstrate such basic economic illiteracy by trying to control demand for an asset while at the same time subsidising its purchase. Allowing 100% of CPF to be used for housing is effectively a subsidy since CPF savings are not taxed. This is undoubtedly a contributing factor to the rise in prices

On the other hand as said previously, the government as the major land owner has a vested interest in seeing house prices rise. I would liken the government’s cooling measures to pressing on a hosepipe to flatten a bulge only to see it pop up somewhere else in the pipeline. In fact it’s worse than that, since at the same time the government is constantly pumping more water into the hosepipe thereby increasing the pressure by giving first-time buyers more money to buy HDB flats and by allowing in so many foreign workers.

Any projected benefit from these subsidies for these first-time buyers is illusory since prices of new and resale flats have risen much faster than the subsidy. While it must be questioned why the government allowed owners of what is supposed to be subsidised public housing to own private properties in the first place, as an economist I do not see how stopping this will affect the real as opposed to speculative demand for housing. It is the former that is driving housing price increases. This stems from the increase in the population and will be true whether people buy or rent. If they cannot buy they will be forced into the rental market which will push up rental yields and this will push up prices. There’s that hosepipe again! It is economically nonsensical to argue that the demand for HDB housing can be controlled by measures restricting HDB ownership while the ability to rent flats to foreigners has not been curtailed. We have seen our population rise by over 25% in the past ten years. While the supply tap was reduced to a trickle, the vast surge in the number of foreign workers undoubtedly pushed up prices since they have to live somewhere and thus pushed up rents. HDB owners would be able to arbitrage between high rental yields and low loan rates. The government’s measures do nothing to address this.

However some of the measures will make the situation worse for a whole section of the population. Reducing the LTV ratio will merely create pent-up demand and mean that young people have to wait longer to get a foothold on the housing ladder. I probably shouldn’t mention possible solutions to the problems that young people have as that has created a whole generation of politically aware youth who in previous elections were apathetic. We already have a birth rate that is so far below replacement levels that our population would halve within a lifetime if we did not have immigration.

The solutions to the housing issue are complex in isolation but more so being intertwined with other issues. You cannot look at HDB in isolation from the issue of immigration and manpower policies and CPF.  We have had over a million new people come to live in Singapore in the last ten years with very little increase in the stock of public housing so it is inevitable that prices have risen sharply. I have said that we need to slow the intake of foreign workers and concentrate on raising the productivity and incomes of Singaporean workers instead. At the same time we should increase the supply of housing by releasing more land and allowing more private sector competition with HDB.  And we need to question why foreign workers and foreign students are being housed in HDB stock.

The whole question of subsidies is moot anyway because we have no market in land.  With government owning such a big percentage of the Nation’s land and being by far the biggest housebuilder there is no such thing as a free market. As a liberal free market economist, I believe that greater competition leads to more consumer choice, better quality and lower prices.*** In the longer term we want to create a genuine free market in land by giving HDB owners the right to buy out the freeholds of their properties.

Because it is a monopolist the HDB has failed dismally to keep up with the increase in population and the inevitable trend towards smaller families in the same way that they have failed to meet the needs of young couples.  For a long time HDB insisted on phasing out the construction of three-room units and concentrating on four- and five-room units where the profit margins are higher. Clearly we need to return to building 3 room units in greater numbers. If these can be built at lower cost (through private sector competition and the release of more land), then they would enable first-time buyers to own their own flat at a younger age and hopefully have a positive impact on our falling birth rate. At the same time we need to increase the percentage available for renting while restricting the rental of smaller HDB flats to foreign workers. By increasing the rental supply and allowing existing owners to buy out their freeholds (whereupon they would be free to rent their flats to foreigners) we could over time peg the HDB back to being a provider of rental and low-cost housing to those on low incomes. We could lower the age at which single people can own HDB’s and we must push young couples with babies to the top of the queue.  We could also experiment with part-ownership part-rental schemes like those in other countries. Measures such as these will have an effect on young people giving them the stability and financial security they need which will have an impact on fertility rates.

So the gap between supply and demand looks more like an ever expanding unbridgeable gulf. The government measures come down to giving with one hand and taking away with the other. It is also no good pretending that what happens in one market (rentals) will not affect another (house prices).  An economist would say that buying and renting are almost perfect substitutes. Over a longer time period Singapore needs to return the role of public housing to providing housing for the population at the lower income levels.  There is no reason why at our relatively mature stage of development 85% of the population have to live in government-supplied housing. This is completely out of line with other advanced countries where the ratios are generally between 20-40%.

Will the affordability of HDB be a big enough issue to swing the electorate this election? We’ll just have to wait and see.

*This theme of how the rapid increase of the population driven by immigration and the foreign labour policy (combined with not enough babies) has not been in the interests of Singaporeans is one I will keep returning  to in future blogs.


***In later blogs I will return to competition in the political arena where it is as important as it is in the business one. And I will demonstrate why Freedoms  are also a vital part of the equation in creating prosperity.


  1. I experience this myself: I was trying to rent a room & I was shocked that the landlords were PRs & foreigners – PRC, India, Filipinos,Malaysians, Indonesians, etc. Only about 20% of the landlords are Singaporeans.

    Am I living Singapore or what? Is this Singapore any more?


  2. Foreigners they get our jobs, get our flats, get our women and they don’t have to spend NS. As a Singaporean, I wish I was a foreigner.


  3. What with so many people investing their CPF in housing, which is currently undergoing, I think it is fair to say, a bit of a bubble these days, what do you think is in store come retirement time for 30 & 40 something Singaporeans buying property in say the last 5 years? I forecast no small amount of pain, but I am no economist so wondering what’s your thoughts on this?

    Related: Most financial advisors would, I expect, say invest your pension monies in stocks and plan for average annual growth around 8% over the multi-decade time frame that retirement planning obviously has to consider. However I understand that CPF monies are actually invested in Singapore government debt yielding fixed 4% pa. Given your financial background, what do you make of this and the implications for Singaporean’s retirement planning?


  4. Hi Mr Kenneth, you have written a very good article.
    Me & my family will also be rooting for Reform Party in the coming GE.
    That being said, we also hope RP will do something for our Singaporean Singles who are only allowed to buy a resale flat upon reaching 35.
    Singaporean Singles are considered as “outcasts” and especially the Males who have served their full National Service liabilities.
    We, singles are forced to buy resale from the open market, mostly from married couples who had bought brand new at a “subsidized” rate from HDB.
    Some of these sellers are also Singapore PRs.
    Isn’t it a joke for a Singaporean to buy a flat from a PR?
    Hence, we hope RP will do something for our Singaporean singles whom i believe, makes up quite a number at the ballot box.


  5. Hi Kenneth,

    Very quickly, two points:

    In addition to the solutions you have proposed, which includes re-focusing on the need to providing public housing (3-room flats) to only the neediest sections of society and leaving the rest to the private sector (to paraphrase you), another measure that can perhaps be considered is reducing the income ceilings for eligibility to public housing (currently $8,000 per household in mature estates and $3,000 in other areas). This should serve to dampen prices and thus benefit younger and less well-off segments of our society.

    The needs of the middle-income group can be left to the private sector, as you suggest. These people are, in any case, in the ‘aspirational’ and ‘upwardly-mobile’ categories and should, arguably, not have to depend upon the government for their housing needs.

    Another, less publicised consequence of high property prices and high rentals is the effect they have on the cost of another basic need, food. The government through the HDB is also the largest landlord for commercial outlets such as coffee-shops, shophouses and wet-markets. Since rent makes up the largest component of costs for a small operator, it has a disproportionate effect on prices. The kway-chap lady at my local coffee-shop tells me she needs to pay $3000 per month for her little stall; she needs to sell a lot of bowls of noodles at $2.50 each to cover the $100 daily rental before she can begin to pay herself. Likewise, the tenants at the wet-market I visit pay high rents for their stalls which eventually translates into higher costs for Singaporeans.


  6. @ Melbourne. Hi I’ve got your two comments, in themselves almost an article. I’m going to have to edit them as they are long and information rich. I’ll put them up point by point or a couple at a time, to give others a chance to digest. I’m afraid the links to the sammyboy forum you list can’t be used because of the rude references to an opposition leader. Can you paraphrase that argument? Thank you


    • 1) Grants and subsidies must be targeted to help certain segments of society. If everyone gets the grant, it just causes price inflation.

      2) In a leveraged scenario, grants can distort pricing. $1 of grant can buy $10 of house.

      3) If you can’t afford million dollar flats, the government gives you a $100K grant and you qualify for a $1 million loan. Magic.


  7. Hello Kenneth,

    Just my two cents’ worth below.

    1) “Allowing 100% of CPF to be used for housing is effectively a subsidy since CPF savings are not taxed. This is undoubtedly a contributing factor to the rise in prices.”

    Just to add something to that which you may want to raise publicly, since you are in a position to do so.

    The various Government grants and HDB subsidies are also a major contributing factor to the rise in prices. As these grants are extended to the majority of purchasers, by allowing the various grants to be used towards the initial deposit, prices can be pushed up by more than the grant amount.

    I had the opportunity to see this first-hand in the Australian property market during 2009, with the Australian First Home Owners Grant.

    Problems with First Time Home Buyer grants

    Because a first time home buyer grant usually pushes up the amount that such a buyer can borrow from a financial institution by more than the value of the grant, in competitive housing markets where a majority of competing buyers will also have access to the grant, the end result is that lower-end houses increase in price also by more than the value of the grant, and first home buyers tend to accumulate more debt than if the grant had not been available.

    In the Singaporean context:

    2) You may want to investigate the role of the HDB in providing credit to the majority of Singaporeans. As long as the Government provides cheap and accessible credit to the masses, it’s hard to see prices going down.

    Banks have to maintain reserve requirements and be careful about who they extend loans to, or else they may go out of business. But what due diligence does HDB carry out when it decides to grant a loan? Nobody knows.

    The one thing that struck me about the Australian mortgage market when I first arrived is that it’s not easy to get a loan here. People whine about the stringent requirements and the high interest rate (7%), but to me it is a good thing. You actually have to think twice before you commit to a purchase.

    3) “Reducing the LTV ratio will merely create pent-up demand and mean that young people have to wait longer to get a foothold on the housing ladder.”

    I believe the decrease in the LTV ratio only affects the second and subsequent mortgage (i.e. not young people), you may want to re-examine that argument. The problem is the small number of BTO releases and the long wait for them to be completed, due to the Government’s changed policy of only starting construction once a certain number of flats have been booked. This is an issue ripe for exploitation.

    4) “If they cannot buy they will be forced into the rental market which will push up rental yields and this will push up prices.”

    Do you have any evidence to support the view that higher rental yields cause property prices to rise? Unless you are talking about investors being attracted to HDBs because of their high rental yields.

    Just asking because I have seen areas where high yields != high prices. I’m sure you’ve seen the same for equities.

    I had the chance to meet your father a long time ago. Good luck and all the best in your work.


  8. Ken, could you elaborate on the below which I quoted from your post? I do not understand the point you are trying to make.

    “I probably shouldn’t mention possible solutions to the problems that young people have as that has created a whole generation of politically aware youth who in previous elections were apathetic.”


    • Thank you Jo. That sentence was not clear. In trying to be concise. the meaning was lost. I am so used to dealing with persuasive figures not words so please allow me time to improve.

      “I probably shouldn’t mention possible solutions to the problems that young people have as that has created a whole generation of politically aware youth who in previous elections were apathetic.”

      What this means is that a disgruntled youth is good for our cause. The younger generation has actually become much more politically aware this election as they reach the realisation that politics affects them directly and that PAP economic illiteracy will impact their futures. I may shoot myself in the foot by suggesting solutions for the PAP to appropriate ( and they frequently do that with my ideas). What has been happening is that the PAP have picked up my ideas and made vague lip service type promises around them. For example they picked up on productivity after I made an issue out of it.


      • Indeed, I was unaware of that politics affect me in the form of govt policies last election. Thumbs up on the blog. The French revolution got started by the invention of the printing press. Here’s a toast to the internet. May we see democracy and freedom of speech and freedom of the press in SG soon! Thanks Ken!


  9. KJ – thanks for the article. I’ve not read it fully, but I’d like to comment on the HDB statistics. I wished we had numbers for a fuller picture, but your analysis of the stats are slightly off (though your main message remains intact – we have an extremely tight housing market with very strange pricing rules imposed by the single largest supplier of housing in that market):

    1. We cannot simply take the 3.7 million residents as the baseline number. Non-residents need a place to stay too and they do not live in hotels. This is covered, as the other comments have suggested, via rentals and perhaps the private market.

    2. The number of 880k units should hint at the number of households, given the draconian rules which bind HDB home ownership to family units. What this means is, while you are technically correct that it is 25% ownership, it is still a correct ballpark figure that 80+% of the population live in a HDB home they own, whether they are the legal owners or their dependents. I think it is reasonable to consider them “owners” even if they are technically vulnerable to decisions made by the legal owners to whom they are dependent.

    3. This is an orthogonal statement I’d like to put out there: HDB homes are never “owned”. They do not even bother to hide the fact that you are signing a “lease” with the HDB rather than a “title deed”. People who believe they “own” their flats are simply playing a delusional game of musical chairs which allows Singaporeans to screw other Singaporeans who get the short end of the stick when they pick up a valueless home about to be re-acquired by the government. I see no rules from HDB guaranteeing the value of homes as they reach the end of their lease life nor do I see any recognition from people that the value of old flats *ought* to decrease in value as they approach their 99-year limits. I believe the oldest flats are approaching the halfway mark soon. If I am not mistaken (saw this NOVA documentary episode about the effect), this exact effect has been studied by psychologists and economists where humans are found to be psychologically vulnerable to this lack of recognition of the value of things and end up creating a bubble from which a number will suffer devastating losses.


    • @Chee Wai, thanks for your constructive comments.
      1. Agreed. I say in my article that the fact that there are another 1.2 million people who have to be housed is a big factor in pushing up prices of HDB flats via upward pressure on rents. That is why I propose to restrict foreigners’ access to the HDB market.
      2. I do not think dependents can be considered as owners. My son lives with me but he does not “own” the property in any meaningful sense of the word.
      3. I absolutely agree with your last point. So far Singaporeans have put faith in the government to buy them out at an advantageous price through SERS to exit HDB properties where the number of years left on the lease has come down substantially. It has suited the government to do so as long as property prices continue to rise (in which an artificially created shortage of supply plays a big role). Once the bubble bursts people may get a nasty shock if the government chooses to let the leases expire instead. It reminds me of the faith people had that the US government would never let a major investment bank like Lehmans go under or that the subprime market would never collapse.


  10. I agree with you Kenneth regarding the mess that this regime has created. What I cannot believe is how poorly coordinated are the different agencies. If the ministers in the cabinet are doing their jobs, then forward planning and coordination would be in their charter when the floodgates were opened since a decade ago. Even a 3rd world government would figure that out. So are our 1st world ministers really that daft? or is there a more sinister agenda at play here? The fact that property prices have been rising in tandem with the massive influx of foreigners tells me that the ‘miscoordination’ was deliberate.

    The GDP growth at all costs benefits the rich, the haves and the rulers. Others have to watch while Nero fiddled.


  11. I didn’t think the day would come when I’d defend PAP policies, but here goes…

    I am not sure about your intentions, but I can see where you got your ideas about releasing public housing into the open market. In the UK, Margaret Thatcher did just that twenty years ago. Result? In dense and expensive global cities like London (like Singapore), young people have no hope in hell of buying or owning any sort of housing. The average age of owning one’s property has gone up to 35-40 (if you’re lucky, that is). The lists for public housing is impossibly long. Homelessness is a huge problem. Lots of people are stuck for years and years in short term rental situations with little security and high rents. Part let/part buy housing doesn’t really work, often of poor quality, and works out a bigger burden that buying straight off.

    Now and then, politicians and others frustrated by this situation would conveniently blame foreigners and immigration. Fact is, in a global transnational world, one cannot fend off immigration without harming one’s economy and society. The problem is a blinkered commitment to the free market – the belief that deregulation is the answer to everything. Can you guarantee that prices will fall if the housing stock is deregulated and released to the market? Note that this is not something that you can undo or take back – once the housing stock is released to the market, the average person or the poor get screwed over (more than they already are).


    • @shaz

      re: “I am not sure about your intentions, but I can see where you got your ideas about releasing public housing into the open market.”

      Isn’t that what we already supposedly have with the move from cost-based pricing to “market-based” pricing?

      So you would rather have a market which is being manipulated for the benefit of one particular party?


      • Ah, well, yes, you have a point. But there is still some marked difference between HDB and private, no? At least in terms of affordability…


      • And it’s more than just about price. That gets everyone’s goat and is a distraction, but a completely free market in housing means that there is no public sector mechanism whatsoever to help, or provide for, or subsidise people who cannot afford to pay for private property.


    • Shaz – I do not believe deregulation will reduce prices. I think the problem is far more complex than this. I think what we are experiencing right now is the result of a gordian knot of tightly-wound PAP policies that span all the day-to-day activities of everyone. Libertarians in the US (I’ll note that I do not agree with a lot of their ideas, however) would call it “government over-regulation”.

      I do not have the answers, but you cannot solve any single problem by reversing any single policy. Turning the whole housing market private is not the single solution to the problem … loads of other factors have to be taken into account for an equitable resolution:

      1. Population (all people living here) versus housing supply.
      2. Income inequality (how many people can afford more than 1 home versus the number of people who cannot).
      3. The existence of sufficiently broad-based rental market. Home ownership is great, but a large number of people living in the USA (myself included) rent our apartments at some fair market value that is not soul-sucking relative to our income (which ties in to the next point).
      4. Income vs cost of living. Cost of living should factor in housing costs and rents. If the median wage is $1,200 and the average rental is $2,000, then you are looking at a severely skewed economic structure. Something *has* to give for a stable society based on a sustainable economy.

      I hope that helps you understand that you are not defending PAP policy with what you have described. The PAP would *love* for us to believe that this is a single-issue problem … that by turning a single “knob” of control, we can fix it. I beg to differ on that … it requires careful analysis of the various sources contributing to the problem and attempting to tweak the system without causing a chain-reaction of failures all through our tightly-wound system.


      • LCW – Well, I don’t have a problem with big government per se, as long as it does most things right. I spent a prolonged period of time in Singapore recently, and I have been pleasantly surprised in several ways. I don’t care what the neo-liberals in the US think – let’s just say they are greedy and crazy. End of.

        The current housing situation is a huge bubble and I think it will persist for a long while. I suspect the bankers and traders who have screwed the economy in the US and the UK are now in Singapore (and Asia in general) doing exactly the same things they do. Which is why regulation and government intervention is important, and we must be wary of sell outs to the neo-liberal agenda. So in some ways, the housing issue is really rather out of anybody’s hands.


      • Shaz – I’m not quite in agreement with your suggestion that ‘neo liberals’ or that free-market principles were the cause of the economic downturn & high prices and the insinuation that they were crazy or greedy. On the contrary, it was precisely big government with their unintended ‘good intentions’ that causes the many problems that we are experiencing now. The so-called bankers and traders that you were referring to were an indirect result of the government coming into the housing market via Freddie Mae and Fannie Mae that distorts and ‘compete’ unfairly with the private sector. Because of the unfair advantage of government’s role in the market, the private sector would have to ‘radically’ modify their products & approach to compete thus indirectly distorting and causing the housing market to overheat and the rest we know it’s history. As for your question on whether deregulation will infact reduce the overall home prices in Singapore, I would counter by asking, has the government’s involvement in the housing market in Spore caused home prices to remain ‘affordable’? I think the answer would be an emphatic NO since that’s the reason we are discussing here. I would put it across that that the ascending home prices is caused by various reasons but I would just highlight a couple of them namely 1. government’s policies in granting house subsidies for 1st time homebuyers, 2. immigration, 3. unrealistic expectation of young couples & 1st time homebuyers & 4. control of land sales. The granting of $30k and the unrealistic expectation of young couples & 1st time homebuyers inevitably caused the 2nd hand house mkt in ‘popular’ matured estate to increase. It’s a simple economic formula – demand > supply. Just read in the newspaper and you will see that there were plenty of new flats & now ECs in areas such as Sengkang, Punggol & Yishun that were not wanted by young couples. Reasons quoted were lack of amenities, proximity to city and public transport, life-style entertainment infrastructures etc. So it’s not a matter that there weren’t ‘affordable’ flats for them to have a roof over their heads, it was their inability to work and align their expectations that caused them either to purchase a flat of their choice at a premium price and if unsuccessful, lament that flats are now priced beyond their ‘means’. Young Singaporeans should learn to take more self-responsibility and stopped blaming the rest and looked to ‘papa’ (government) for assistance to realize their ‘dreams’. The next big cause for the skyrocketing property prices I could think of was the unexpected oversight on the impact of increased immigration of foreign talents, PRs & economic growth in this region. To put it simply due to the lack of space, these 3 factors contributed to a great pool of demand in the local property market & with the HDB slowing the release of land sales cos there were still plenty of unsold flats in Sengkang, Punggol and other Northern Eastern part of Singapore, the sudden increase in demand clearly outstripped the no. of supply therefore causing property prices to reflect this phenomenon. As I do not wish to horde the blog, perhaps I could just sum up at this point in time that with a ‘big government’ managing & ‘stabilizing’ (intervening) in the property market, the increased property prices is just another instance of well-intentioned big government causing yet another unintended consequences. As to whether true market competition would indeed reduce homeprices, I could only say that nothing is guaranteed. Just like our forefathers who came to Singapore, there was no guarantee that they will succeed. It was only through their sheer hardwork, never-say-die attitude and enterprising spirit in a ‘small government’ setting (the British adopts a relatively hands-off approach economically & in business) that makes them successful and wealthy. Their success & wealth is not a result of what govt does or ‘advises’ them to do. To put it simply, and based on history, I’m confident that the free-market system while has its imperfections, is still the best system to allocate resources & restore the price equilibrium in the property market. Government should stand aside & let the private sectors create & compete in the property market. With real free-market competition (not pseudo ‘free-market’), I believe prices will then be truly stabilized & reflected fairly.


  12. “And we need to question why foreign workers and foreign students are being housed in HDB stock.”

    “… allowing existing owners to buy out their freeholds (whereupon they would be free to rent their flats to foreigners)… ”

    The above two statements appear to be contradictory to me .


    • @Christopher, there is no contradiction. Public housing should be for Singaporeans especially the lower income groups who would never be able otherwise to buy a property or find one at a rent they can afford. However existing owners who buy out their freeholds should be treated to all intents and purposes as private property owners who enjoy the same rights.


  13. KJ, how many of our HDB flats are still “owned” by SPRs who no longer stay in Singapore nor contribute to SIngapore’s economy? How many of these “owners” have gone back to their countries because they cannot compete for jobs in Singapore, hence, not “talented” and totally “uncompetitive”? Why are we subsidising their living in their home country with our sacrifaces for economic growth through rentals paid to them?

    Why should SPRs even be allowed a HDB flat? They are “talents” so they should buy private properties.


  14. KJ, have you been to Shanghai, Nanjing and Hangzhou?

    The difference between the 3, even though in a same nation, is that 1 of them feels like it has no spirit, no culture, no love. It exists solely for transactions and transactions only.

    Singapore to most of us, is a country, a sovereign nation, a home. We are not goods, and we should not exist solely for transactions.


  15. Hi KJ, good piece. Except please note HDB policy of “two bites of the cherry”, which many people do not fully comprehend, until too late.

    The high prices mean young ones buy smaller units first, due to lack of finances. When they have kids, they need more space, and would have more savings by then, to buy a bigger unit. But wait, what about when the kids get married and move out? They’ll have too much space!

    HDB’s rule is that your first 2 purchases will be “subsidised” and not subject to tax. Under such considerations, young families should buy the BIG unit first, then when the kids marry and get their own place, the couple can “downgrade” to a smaller unit with the second “bite”. So the high prices basically screwed up this 2 bite policy as well. Talk about not wanting kids. You have no space to house them!


  16. Another problem I see with housing is renting to foreign workers. While I honestly do not have problem with that (and I’m not trying to be politically correct here), it just become ridiculous when you have 10 to 15 foreign workers (those construction workers) squeezing into one 3 room flat. It happen to my sister when she was living at St George Road. Her neighbor rented out their house and there are a lot of workers staying in that house, after a while the smell became unbearable as they would just hang all their dirty cloths outside and everywhere in the house. To make long story short, my sister sold her house and move to Bukit Panjang. This happen about 10 years ago. I don’t know if the rules has changed now.


  17. Kenneth, as I have spoken to you several times – do raise the plight of the mentally ill in your campaigns, talks, public forums etc. There is little or no consideration whatsover shown to our marginalised communities, the eldery sick & so on.

    Last Monday, I wrote this letter to the TODAY newspaper regarding noise polloution. Read it here:

    Letter to TODAY: S’pore’s becoming too noisy
    The most serious problem created by sound pollution is the impact on our health
    Letter from Raymond Anthony Fernando

    I REFER to the letter, “Can’t sleep for the MRT clatter (Jan 27), and share Tan Lye Chye’s sentiments.

    In our fast-paced lives, our homes should be a place where we can relax and have peace of mind. Yet, this is not possible in the estate where we live in Ang Mo Kio because all the year round, there is noise pollution almost seven days a week.

    Before residents can fully recover from two years of noise from the Lift Upgrading Programme, we will now have to bear with more noise pollution and inconvenience from the impending upgrading inside our flats, with the changing of pipes, doors and toilets.

    I will then have to search for alternative accommodation as my wife, who is coping with schizophrenia, cannot bear excessive noise. Her mobility is also severely impaired because of arthritis.

    Shouldn’t the HDB show some empathy and provide us with affordable alternative accommodation if they insist on carrying out such works? Should not there be consideration shown to the sick and those who are convalescing at home?

    Funeral wakes are carried out almost every month opposite our block and the chanting can last as late as 11pm over three to four days. Every week, the irritating noise of the blower used to remove the cut grass disrupts the quiet we so badly need at the close of the week.

    There is also excessive noise when clan associations regularly carry out their activities late in the night, and this sometimes stretches for a week. In the middle of the night, the beating of the drums does not allow anyone a wink of sleep.

    Karaoke singing in HDB flats should not be encouraged. To my left, a couple sings at the top at their voices every weekend, sometimes past 1am. Above my flat, another family also engages in this activity with total disregard for residents.

    The most serious problem created by sound pollution is the impact it has on our health. Besides disrupting sleep, noise pollution has also been linked with stress, heart disease, high blood pressure and stroke.

    As I have to write for a living, I have no choice but work in the wee hours. Doesn’t a caregiver also need rest? Little wonder I have suffered burnout countless times.

    Raymond Anthony Fernando


  18. Drastic measures are definitely needed to improve the TFR. Immigration has exacerbated the problem rather than improve it. Just as immigration is a cause of other problems like housing.

    I find myself feeling resentful, when I see a PRC, an Indian, a Filipino and I know they are meant to replace our major races. As individuals, they are not to blame. But their communities which have sprung up, fighting for limited jobs and resources are a slap in the face of natives who never had a say in whether, the current Singapore was the dream we all had in mind when GCT spoke about the Swiss standard of living. As to whether they will integrate and set up home here? Time will tell, but my gut says no.

    I hope you get a chance to form the government, sooner than later Kenneth. I will like to see your ideas come to fruition.


  19. I got the same findings on the recent property issues. When I tried to explain the whole logic and findings to others. They were like rather surprised and ignorant on whats going on. Its like I am telling them some fairy tale stories. Very sad to say most of our fellow Singaporeans are such which makes them an obedient follower and they cannot compete fairly if SGP is to becomes a true global city.


  20. I shall first state that I find it abominable that foreign students and workers are being housed in HDB flats which have been built using Singaporean taxpayers’ dollars, while there are homeless Singaporeans living on the streets. (I refer to those who sleep in the Void Decks on pieces of cardboard – I’m presuming they’re there because they have nowhere else to sleep, not because they like sleeping on cold and hard surfaces in public).
    Secondly, it is downright wrong of the current government to force people to put a portion of their hard-earned CPF savings into an annuity which some or most of them may not live long enough to receive any payouts from. This PAP government is simply shirking its responsibility to provide for the welfare of the citizens of Singapore, by making them pay for their own welfare insurance. And yet the PAP still collects taxes from those same citizens. I shall coin a new word – angruity – to describe the justified anger of Singaporeans at the enforced annuity.
    Thirdly, the HDB, as the landlord (absolute monarch may be a more fitting title) of the apartments in which most Singaporeans live, appear to be unable to even properly maintain the common areas of the apartmental blocks which they lease to Singaporeans. Every month, every HDB apartment dweller has to pay the SC & CC fees, but the common areas are not maintained anywhere as punctually as the SC & CC charges are collected. If SC & CC charges are not paid for one month, late payment fines are levied against the lessee. But no refunds are given when the blocks are not maintained!
    Lastly, no Singaporean can factually be said to own a HDB flat, as HDB flats are never sold – only 99-year leases on the HDB flats are sold to Singaporeans and Permanent Residents. So that 85% are all just tenants of the HDB, whether they are renting a flat or leasing it!


  21. Excellent well-thought article……..I agree with you 90%.
    Keep up the good work, Ken,…….my family and I will be rooting for Reform Party’s success in the coming GE. Hope you will contest an SMC as chances of victory will be better. Really looking fwd to hearing you in Parliament after the elections!


    • Thank You for your feedback Michael. I have to say that I am most interested in the 10% that you disagree with. It would make me very happy if you could share some of that here as I am genuinely interested in being informed by other opinions. And then we could initiate a real discussion of the issues on this blog.


      • Back in the 60s our stupid education system did not think economics an important subject enough to be made compulsory for older students at O and A levels (they do now). As I was a pure science student (Chemistry, Biology, etc), I never studied economics (considered a strict Arts subject!)
        even at O level.
        That is why I could not quite comprehend abt 10% of your piece and thus stated I agree with 90% (those I understood) of it. It does not necessarily follow that I disgree with the other 10% which I could not comprehend.
        Notwithstanding, in a true democratic society,unless we are robots, we must never state that we agree 100% with anyone especially our leaders…..there must be some allowance for disagreement and thus discussion and debate. The PAP will never agree to this as they prefer 100% obeisance…….see what happens now to Tunisia, Egypt, Jordan and Yemen? I have no doubts this revolutionary spirit starting in 2011 will ultimately spread east to Asia and Singapore. It’s a matter of time.


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