24 December 2010

NOT Wikileaks, but Wikipeeks into LTSA and GPCs

NOT Wikileaks but Wikipeeks! And since it is Christmas, turkeys for these Wikipeeks are in order!

1st Wikipeek ... into how the Land Titles (Strata) Act (LTSA) is retrospective in effect, as further elaborated upon in paragraph 4 below.

Singapore prides herself on the "rule of law". Legislation should be prospective, not retrospective, because it would otherwise undermine one of key characteristics of "rule of law". Retrospective legislation destroys the certainty of law, is arbitrary and is vindictive (being invariably directed against identifiable persons or groups) which - in this case - would be all strata-title owners who purchased their units before the inception of LTSA in Oct 1999 that govern en bloc sales. It serves to reinforce my point that LTSA is an unjust law at source (just as apartheid laws were unjust) with full legality but with highly dubious legitimacy.

2nd Wikipeek ... into how LTSA has calibrated the en bloc sale process to run counter to the "best practices" of Government Land Sales (GLS). In Singapore, there are only two sources of land supply: (a) GLS and (b) en bloc sales. The relevance of this comparison is set out in paragraph 5 below.

In fact, it is very telling when you take a step back and reflect upon the Big Picture of:

(i) The brazenly skewed calibration of LTSA as per my 2008 and 2010 blog postings, even to the extent of making it retrospective in effect;

(ii) The ostensible inability by the authorities (viz, MinLaw, SLA, URA, MAS, CPF) to collate and/or consolidate comparative statistics to analyse pre- versus post-en bloc financial, economic and social consequences on the population, especially extant citizen owners, despite being given two real-life examples culled with my very limited citizenry resources as per my previous blog posting:

(iii) MinLaw's fear-mongering about one-for-one (1-4-1) exchange mechanism that has been adopted by other countries as one of the templates for urban rejuvenation and higher land-use intensity and MinLaw's resistance towards a "win-win-win" exchange business model (rather than the present "win-lose" sale method) explained in my old 2008 National Day blog posting of:

They tell you ONE THING and one thing only! Our Gahmen is purportedly IGNORANT about and INSENSITIVE to this "new" (but in fact, underpinned by age-old values of common sense and rectitude) concept of "shared value", as articulated in the article entitled: "Creating Shared Value" by Michael Porter and Mark Kramer, published in the Harvard Business Review (HBR) (Jan-Feb 2011 issue). In essence, this HBR article made the following key points: [Bold emphasis is by The Pariah.]

- "The capitalist system is under siege. ... Business is caught in a vicious circle ... They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success.

- "The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging."

- "The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges".

- "The synergy increases when firms approach societal issues from a shared value perspective and invent new ways of operating to address them."

- "Realizing it will require leaders and managers to develop new skills and knowledge – such as a far deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/nonprofit boundaries. And government must learn how to regulate in ways that enable shared value rather than work against it."

- "The concept of shared value ... recognizes that societal needs, not just conventional economic needs, define markets."

- "However, companies have overlooked opportunities to meet fundamental societal needs and misunderstood how societal harms and weaknesses affect value chains. Our field of vision has simply been too narrow."

- "Governments ... will be most effective if they think in value terms – considering benefits relative to costs – and focus on the results achieved rather than the funds and effort expended."

- "Governments ... often assume that trade-offs between economic and social benefits are inevitable, exacerbating these trade-offs through their approaches." [Comment by The Pariah: Similar to the fears of former Law Minister, Prof S Jayakumar, about trade-off between 1-4-1 exchange and the resultant lower en bloc sale price, the current Law Minister Mr K Shanmugam’s ministerial reply in Parliament on 22 Nov 2010 on the Residential Property (Amendment) Act similarly cited “Trade-Offs”, thus revealing the old school “win-lose” mentality within the Establishment-types as opposed to exploring “win-win” opportunities under the new model of “Shared Value” as articulated in this HBR article.]

- "The right kind of government regulation can encourage companies to pursue shared value; the wrong kind works against it and even makes trade-offs between economic and social goals inevitable. Regulation is necessary for well-functioning markets, something that became abundantly clear during the recent financial crisis. However, the ways in which regulations are designed and implemented determine whether they benefit society or work against it."

- "Regulations that enhance shared value set goals and stimulate innovation. They highlight a societal objective and create a level playing field to encourage companies to invest in shared value rather than maximize short-term profit."

- "First, they set clear and measurable social goals ... Second, they set performance standards but do not prescribe the methods to achieve them ... Third, they define phase-in periods for meeting standards, which reflect the investment or new-product cycle in the industry ... Fourth, they put in place universal measurement and performance-reporting systems, with government investing in infrastructure for collecting reliable benchmarking data ... Finally, appropriate regulations require efficient and timely reporting of results, which can then be audited by the government as necessary ..."

To avoid confusion between Corporate Social Responsibility (CSR) and Creating Shared Value (CSV), the HBR article also sets outs a comparative chart:

As you may note from the right-hand column of this blog, I have set out a string of "take home" summary points. Oooops ... "take home" summary point is my faux pas because en bloc sales take away your home! Anyway, bearing in mind such summary points, we should then question as to whether institutional checks-and-balances are in place vis-a-vis MinLaw, eg, in curtailing LTSA from being retrospective in effect or in preempting LTSA from running counter to GLS best practices. Having gone through due process of multiple parliamentary bill readings in the last and current centuries, that's where it would now lead us to the role and responsibilities of another animal called Government Parliamentary Committees (GPCs).

1. Government Parliamentary Committees - Framework. Whilst I
am fully cognizant of what Curiosity does to the Cat, I am nonetheless curious about the role of GPCs within Singapore's brand of parliamentary democracy. It is part of my active citizenry in engaging the authorities on the en bloc law and the ramifications arising therefrom.

1.1 In the book entitled “The Singapore legal system” (2nd edition) edited by Kevin Tan Yew Lee, it reads as follows:

QUOTE - Government Parliamentary Committees 159
Early in 1987, the First Deputy Prime Minister Mr Goh Chok Tong unveiled plans for the formation of Government Parliamentary Committees (GPCs), each focussing on a specific area affecting the future of Singapore.160 These GPCs must be distinguished from other parliamentary committees in that they are organs of the People’s Action Party and are formed, not as a constitutional obligation or a convention but at the initiative of the Government of the day. Mr Goh cited three main reasons for the formation of GPCs. First, more participation from the MPs was needed, especially in a Parliament dominated by one party, secondly, the public would also have a say in the policies through the resource panels and thirdly, it would strengthen our democratic institutions and take us into the 21st century.

In all there are currently 11 GPCs each corresponding to a government ministry, and each consisting of five backbenchers, and chaired by one senior Member. Each GPC is backed by a 12-member resource panel and their task is to concentrate on a particular area affecting the government of the country examining all intended Bills in that area and in some instances, they will be consulted even before the Bill is drafted.

The creation of GPCs was, I think, a step in the right direction given the state of oppositional
representation in Parliament. Its use as simulated critics of Government legislation will definitely be far more effective than expecting backbenchers to take on the role of Opposition members. Furthermore, the level of debate and discussion on each policy has, in my opinion, reached a greater level due to the specialised nature of the GPCs and the utilization of experts outside of Parliament. This has led community leaders and professionals to participate more actively in the affairs of the state, ALBEIT BEHIND THE SCENES.

159. This brief account has been compiled entirely from newspaper clippings. See The Straits Times, 17 January 1987, at pp 1, 22 and 23; The Straits Times, 14 February 1984, at pp 1, 14 and 18.
160. See The Straits Times, 17 January 1987, at p 1. - END QUOTE.
[Capitalization emphasis is by The Pariah.]

1.2 In the then Prime Minister Mr Goh Chok Tong's speech at the Official Opening of the Commonwealth Parliamentary Association (CPA) 1999 Mid-Year Ex-Co Meeting, 4 May 1999, under the sub-heading of "Widening Political Participation", Mr Goh said:
QUOTE - Another feature unique to Singapore is the Government Parliamentary Committees (GPCs). Introduced in 1987, GPCs are limited to MPs from the governing party. They monitor closely the policies of particular ministries. Assisting the GPCs are Resource Panels, comprising MAINLY EXPERTS AND INTERESTED LAY PERSONS. The creation of the GPCs allows for greater participation by the backbenchers. They provide a wider range of views in Parliament and help Cabinet Ministers refine policies. They also serve as sounding boards and provide valuable feedback and suggestions to the relevant ministries on issues of public interest. - END QUOTE. [Capitalization emphasis is by The Pariah.]

1.3 But something apparently happened to GPCs after 1991 General Election!!! The following is an extract from an obstensibly encyclopaedic-based web-site about our Singapore Parliament:
QUOTE - It was envisaged that GPC members would act as a sort of proxy opposition in Parliament, challenging the views of Cabinet members. However, in the 1991 general election the PAP LOST FOUR SEATS TO OPPOSITION PARTIES and SUFFERED A 2.2% DROP IN POPULAR VOTES compared to the 1988 election. Goh, who had become Prime Minister in 1990, said in a post-election press conference that GPCs would be abolished as the increased number of Opposition MPs meant they were no longer needed. The PAP would return to the old system of having internal party committees meeting in private. A few weeks later, he said that GPCs would continue to exist, but their members would no longer take an adversarial stance in Parliament. - END QUOTE. [Capitalization emphasis is by The Pariah.]

In 1991, there were only 81 seats in Parliament. So, it would appear that 4 opposition seats out of a House of 81 and a 2.2% drop in popular vote from the previous General Election (GE) was sufficiently uncomfy to warrant GPCs to be de-fanged (not that they ever drew blood from even an occasional nose bleed)! In any case, when the House was expanded to the present-day 84 seats and opposition MPs dwindled to a paltry 2, it would appear that GPCs are still obliged to lip-sync in soaring choral harmony these days, ugh?

Hmmmm ... digressing a little ... IF popular vote in the upcoming 2011 GE should plummet by, say, more than 2.2% (as it did in 1991 GE) or 14.3% (being the highest-lowest maximum fluctuation in PAP support level in the last four GEs of 1991, 1997, 2001 and 2006), I wonder what size of weighty PAP hailstones would befall upon us from Heaven as all Hell breaks loose by their definition? It is probably an unChristian musing as to what would happen ... if it turns out to be, hypothetically speaking, a strategic GE walkover with a 52.3% win (66.6% last GE win minus 14.3% maximum swing)!

Musing, musing ... that's all I'm innocently doing WITHOUT forgetting that we don't know the precise number of newly minted Singaporeans who would be voting in 2011 GE. I suppose one could hazard an "educated guess" about the new-mints by comparing the Dept of Statistics' 2010 and 2006 mid-year estimates (bearing in mind our declining birth rate in the absence of baby bumper crops since the last Dragon Year of 2000, hitting a historic low fertility rate of 1.22 in 2009 with an unsurprising 2003 Durex survey finding that named Singapore as the one of the three countries with the lowest sexual frequency scores, viz, Sweden (102), Malaysia (100), and Singapore (96)):

Total Population:
2010 - 5,076,700 (100%)
2006 - 4,483,900 (100%)

Singapore Citizens:
2010 - 3,230,700 (63.6%)
2006 - 3,145,800 (70.0%)

Permanent Residents (PRs):
2010 - 541,000 (10.7%)
2006 - 472,700 (10.5%)

Non-residents (non-citizens/PRs working, studying or living here):
2010 - 1,305,000 (25.7%)
2006 - 875,500 (19.5%)

2. GPCs - Pay and Pay OR No Pay. According to the People's Action Party (PAP) web-site updated 18 May 2009, there are 10 GPCs, comprising 9-11 backbenchers with most committee members doubling-up for two GPCs. Sensibly, there is also a pattern of cross-ministry representation with a spectrum of knowledge/skills in each GPC (eg, MinLaw's Senior Parliamentary Secretary sits on the National Development GPC, and MND's Senior Parl Sec is in the Law GPC).

However, there is another level of de-fang in that a GPC member for a certain ministry who is also an office holder of another ministry CANNOT table parliamentary questions relating to the GPC ministry (eg, MND's Senior Parl Sec who is part of the Law GPC cannot table questions in Parliament for MinLaw). Hmmm ... does that mean they are wary even of their trusted office holders in case of back-biting of their own party cadre members of ministerial rank in the House?

It is NOT known who are the "mainly experts and interested lay persons" in the Resource Panels who will "help Cabinet Ministers refine policies ... serve as sounding boards and provide valuable feedback and suggestions".

Since these de-fanged GPCs are PAP organs, it is also NOT known whether the committee members are paid extra remuneration commensurate with their duties and responsibilities.

Whether as pseudo-oppositional adversaries in the past or as obligingly cooperative bedfellows at present, the PAP obviously consider the role of GPCs to be IMPORTANT to our brand of parliamentary democracy to commit such levels of backbencher resources. So are GPC members paid?
Yes or No?

2.1 If the answer is "Yes": I trust that GPC members are NOT directly paid with public funds but with PAP party funds. If the GPC remuneration comes from public funds, the Auditor-General and/or Public Accounts Committee should have stepped in since 1987.

Even if the GPC remuneration comes from PAP party funds, I reckon that there remains a distinct element of public accountability because such feedback and suggestions from GPCs/Resource Panels go towards the various government agencies' and ministries' calibration of proposed public policies and laws to be passed by Parliament.

As I was commenting to a top civil servant recently (hee, hee ... he calls himself a "retiree" these days which is a definite misnomer), often times I resent being categorized as a stakeholder by the Civil Service. Reason: I am more than a stakeholder. I don't buy and sell my stakes depending on some ROI target or some equally crass yardstick. I am a citizen of "not a country". I live (and die) by the policies and laws so cleverly calibrated by the Civil Service and the Government for as long as I remain a Singaporean.

As a top civil servant, he'd be cognizant that my stance as a citizen runs pretty much as a mirrored parallel to what historian Lord Thomas Macaulay said in the British House of Commons in the 19th Century: "We are your leaders. In our hands are the issues of great good and great evil - the issues of the life and death of the State." Hence, what is an issue of life and death of the State is - on the obverse side of the same coin - an issue of life and death of the citizens of such State!

2.2 If the answer is "No": Clearly, there is use of public resources because backbenchers are paid with public funds. In the aftermath of the global financial meltdown in 2008, Straits Times (25 Nov 2008) reported that MPs "whose allowances are pegged to public sector pay, will get S$190,000, down 16 per cent" (viz, PRE-meltdown, it would have been S$225,000). It would appear that there is serious moolah in this PART-TIME JOB as "backbencher" - about S$16k to S$19k per month (S$190k or S$225k ÷ 12 months, respectively)! Net of expenses for secretariat/research and such like, it would likely be S$12k-S$15k each month for a part-time backbencher.

Based on the booklet entitled "What is Public Accountability" published by the Policy and Research Department of the Auditor-General’s Office, July 2010:
QUOTE - Public accountability is an important pillar of any parliamentary democracy. Any public body that uses and manages public funds AND RESOURCES is accountable to Parliament. ... The citizens of Singapore are the ultimate owners of our nation’s financial resources. It is important that they understand and support the processes and systems that ensure public accountability. - END QUOTE. [Capitalization emphasis is by The Pariah.] Yada, yada, yada ... now that I "understand" it, can I get some answers from the Auditor-General's Office before I, as a thinking citizen, can be called upon to "support" it with my heart, mind and soul???

3. GPC - Contributions with Accountability and Transparency. Based on the above reasoning (which I trust is fairly reasonable), one could then reasonably ask:

- What were the contributions of GPCs for (A) Law, (B) National Development and (C) Finance to the LTSA law?

- Did GPCs weigh in LTSA ramifications, as correlated to Building Maintenance and Strata Management Act, Central Provident Fund Act, Residential Property Act, Housing Developer (Control and Licensing) Act, Housing and Development Act, and all other policies by URA, BCA, SLA, HDB, CPF and MAS where they impact (peripherally or directly) upon our property market and the use of CPF savings sanctioned for residential purchases?

Just as the price of rice is to Thailand/Vietnam, ... the price of onions is to India, ... so too is the price of property to Singapore with our teeny 710.3 sq km and the highest city population density in the world at 7,022 persons/sq km (and likely growing)!

As PM Lee Hsien Loong said during parliamentary debate on Civil Service salary revisions on 11 Apr 2007: “The Cabinet is accountable to Parliament, it is accountable to all Singaporeans.”

Similarly, the then Senior Minister Goh Chok Tong said in his speech on "Governance and Growth in Emerging Asia" at the Asia Society Hong Kong Centre’s Annual Dinner on 11 Nov 2008: "I believe that all successful political systems share at least four broad attributes. First, there must be accountability and transparency ..."

So, can GPCs be accountable and transparent? Will they? And where GPCs have tapped on the knowledge and skills of a Resource Panel of "community leaders and professionals to participate more actively in the affairs of the state", why is there the need for it to be "behind the scenes" as author Kevin Lee put it in the abovementioned book?

What is there that cannot stand up to public scrutiny? Are these GPC members as holders of political office and/or parliamentarians such shy daisies who will wilt in the light (or heat) of day? As politicians, surely they know that the political arena is a hot kitchen and those who
choose to step into the kitchen must be able to take the heat, eh? Can GPCs publish a report of their contributions to their respective ministries? It doesn't matter whether their contributions are accepted or implemented, in full or in part, immediately or deferred for future re-consideration. At least, it would assure plebian "lesser mortals" that the institutional checks-and-balances are actually at work and are effective to some reasonable extent (perhaps 75%? OK lah, even if they are only 66%)!

Acta Non Verba ("Action, Not Words"), eh?

4. LTSA is given retrospective effect as a law. Singapore take pride in good governance and rule of law. Hence, laws are almost NEVER passed with retrospective effect.

However, the following paper shows LTSA's retrospective effect by drawing parallels with the recently introduced Seller's Stamp Duty: http://www.scribd.com/doc/45870666/Singapore-Land-Titles-Strata-Act-Law-passed-with-retrospective-effect

Way back in 1999 and again in 2007, I raised the issue of constitution in asserting that LTSA was given retrospective effect, as shown in these two initial blog postings in Mar 2007:

Para (e): http://singaporeenbloc.blogspot.com/2007/03/understand-en-bloc-majority-vs-minority.html

Para 1: http://singaporeenbloc.blogspot.com/2007/03/constitution.html

Luckily (for me), Time is on my side. With the passage of Time since 1999 and by using the Seller's Stamp Duty in 2010 for comparative purposes, this point of retrospective effect is now proven. I rest my case.

5. LTSA runs counter to best practices of Government Land Sales. The best practices of Government Land Sales (GLS) should be extrapolated for en bloc sales to the extent applicable. Even where they are NOT applicable due to the inherent differences in the nature of these two animals, en bloc sales certainly should NOT be deliberately skewed and calibrated to run counter to the best practices under GLS. That, in my opinion, is how en bloc sales are effectively turned into a mockery and a farce! A legalized scam, if you will. Classic oxymoron, eh?

The following paper shows the "Possible fallacies of the 'free will of Majority' in en bloc sales" and how en bloc sales run counter to GLS Best Practices:

6. Context. Let's contextualize ACCOUNTABIILITY and TRANSPARENCY by drawing some parallels from East to West ...

In the East (China) - Business Times article entitled "China to crack down on shady developers" (21 Dec 2010) reported that "the Ministry of Land and Resources highlighted the 'complicated' situation in the sector and said high prices in some cities had triggered widespread public concern" and that "developers that build high-end properties on land that was initially sold for affordable housing projects will see that land repossessed by the government and their income confiscated, it said".

Such land sales by Chinese local authorities to commercial developers are similarly on "willing buyer, willing seller" basis and yet the Chinese regulators are shifting the onus to these developer-buyers who will be made to bear the brunt in the event of misconduct or under-selling by the sellers. Hence, the Chinese authorities are laying claim to political will to call it to account. The Chinese Commies are already putting into practice what American management guru, Prof Michael Porter, exhorted in the abovementioned HBR article, viz, "Governments ... will be most effective if they ... focus on the results achieved". Talk about getting more bang for your buck and being "Cheaper, Better and Faster" - According to Phoenix TV channel broadcast in Sep 2006, our Singapore PM Lee Hsien Loong's pay is 126 times that of Chinese President Hu Jintao (ie, PRE-Apr 2007 ministerial pay hike):

In much the same way that the Singapore Gahmen assert that en bloc sales are similarly based on "free will of Majority" on "willing buyer, willing seller" basis. Whilst Singapore's en bloc scenario is NOT a mirrored parallel with the Chinese land sale situation, there are enough common denominators (viz, contractual sale, free market forces, unlocked land value accruing to developer-buyers, high profits from redevelopment earned by developer-buyers of such land).

Hence, I can't help but wonder what the Singapore Gahmen is doing about the "David vs Goliath" en bloc battles with "Double the price; Half the size" shortfall typically faced by individual owners (the little Davids) vis-a-vis the "Double the price; Double the size" windfall commonly lapped up by corporate developer-buyers (the behemoth Goliaths), as shown by the two real-life examples in my previous blog posting:
If guided by good sense and rectitude, divergence and competing needs are not necessarily a case of "the Government" versus "the People", or "Big Business" versus "the People", and greater convergence could be forged. Piggy-backing on Prof Michael Porter's key exhortations as already practised by the Chinese Government, I'd like to ask: When, when, when will our Gahmen start to "focus on the results achieved" from this en bloc phenomenon??? The "results achieved" MUST NOT be evaluated from the "narrow" twin-faceted perspectives of urban rejuvenation and higher land-use intensity under our national agenda BUT ALSO from the more encompassing perspective of "fundamental societal needs" and the "societal harms and weaknesses", as translated into financial, economic and social consequences for extant en bloc owners and environmental/ sustainability concerns for our land.

In the West (England) - As Britain's Financial Services Authority are contemplating deferrals and other regulatory caps to battle the British banking industry's shameless bonus pay-outs after the massive public bail-out as a consequence of the 2008 global financial meltdown, the bankers make all kinds of threatening noises about relocating to other countries as they claim that the UK would then become a less attractive financial centre. Guess what the British Business Secretary, Mr Vince Cable, said? He retorted: "We're not going to be bullied". These arose from talks between senior bankers and the Chancellor of the Exchequer and Mr Cable.

Likewise, in Singapore, there is constant dialogue between industry and Gahmen. But you'd have noted my previous observations in the 3-part Casino Singapore blog postings about:

- the "too little, too late" baby steps taken by MinLaw, MND, HDB and MAS in respect of en bloc law, intense flipping of private strata-title/landed and public housing properties, legislative and policy exploitation, etc,
- the brazen backbending by URA, BCA and SLA,
- the backtracking by IRAS, and
- the lack of action by CPF Board.

The above state of affairs starkly contradicts PM Lee Hsien Loong's comments about the Wall Street fiasco during his interview in Chicago: "So you’ve got to find a way to have a supervision which is going to adapt because whatever rules you make, the people who are operating — the bankers, the financiers — will find a way to optimise" (CNA, 16 Apr 2010). Ditto for the developers, eh? Sigh ... knowing it is one thing; doing something about it is another, as they say.

Therefore, will our Gahmen continue "to be bullied" by the all-mighty corporates? Or will our Gahmen next prove that they are capable of living up to PM Lee's expectations of "adapting" nimbly - to be a little (instead of far) behind the curve even if they can't be ahead of the curve? I reckon our regulators see their efforts to serve corporate interests with such zeal and zest as "business-friendliness" and "fostering GDP growth for public good". Substituting "GDP growth for public good" with "GDP bonus for private good" in their Key Performance Indicator (KPI), it is not too difficult to appreciate why most regulators would NOT (or why they'd choose NOT to) examine if they have been had! Truth hurts too much, I suppose.

However, beyond a certain point, it becomes an abdication of regulatory duty and/or a loss of regulatory focus. It could also be perceived as a case of being intimidated/bullied or being gullible and conned into believing the corporate spin - similar to how Bernie Madoff effectively fobbed off the Securities Exchange Commission watchdog from nailing down his Ponzi scam despite specific and repeated "red alerts" by whistleblower Harry Markopoulos. That's when Governance gets tainted with questions of Credibility and Moral Authority!

During the recent Great Recession triggered by global financial/economic implosion, the Singapore Gahmen also used public funds to bail-out our corporations, as did the governments of many other countries. These corporates were direct beneficiaries of public moneys doled out under the 2009-10 Resilience Package EVEN AS THESE CORPORATIONS WERE ANNOUNCING HIGH DOUBLE-DIGIT OR TRIPLE-DIGIT PERCENTAGE INCREASES IN NET PROFITS FROM 2H 2009 in the case of developers, as per my previous blog posting:

As these corporate developers took public funds as part of the national bail-out, they must similarly be held to account. Are MinLaw expending resources to collate and publish equivalent data for the estates that went en bloc during the 1999-2000 and 2005-2007
frenzies where the redevelopments have since been launched for sale? Now that we have the benefit of hindsight and a track record of slightly more than a decade, the two sets of 1999-2000 and 2005-2007 en bloc data can - with credence and credibility - call into account this piece of legislation that invoked majoritianism to impinge on private property rights, driven by potential commercial benefit/profit that is typically actualized, especially under the new en bloc business models presently adopted by developer-buyers. Such statistical analysis would perhaps provide a sound basis for MinLaw to seriously explore other counter-balancing measures (eg, mandating one-for-one (1-4-1) exchange for qualifying Owner-occupiers as an additional settlement option) to "do right" by the citizens whom they are supposed to serve (rather than the corporates).

Deafening silence from the GPCs only proves PAP's lack of accountability and transparency in respect of the LTSA papers submitted to GPCs for Law and National Development. Likewise, it reinforces similar unaccountability and opacity on the part of the Civil Service when MinLaw fails to make public the pre- and post- en bloc data, bearing in mind that the consequential ramifications affect the property market with rippled effects across public and private housing sectors and with massive CPF withdrawals for residential purchases at stake.

Issues of ACCOUNTABILITY and TRANSPARENCY are NOT limited only to LTSA. Similar parallels can be traced to the series of flash floods in Singapore in 2010 when we were told by:

- Minister for Water Resources and Environment Encik Yaacob Ibrahim: the Orchard Road "flood was caused by an intense storm” (Duh?); such floods occur only "once in 50 years" (Ooops, after the worst flood in 1978, the good minister forgot about the flash floods in 2007, 2009 and 2010!);

- Prime Minister Mr Lee Hsien Loong: that for "an island in the tropics", it is not possible "to be completely free of floods”, that "we have to learn from these episodes, do post-mortems, find out what happened, and upgrade our infrastructure and systems" (To date, six months have gone by ... any publication of such detailed post-mortems yet?);

- Minister Mentor Mr Lee Kuan Yew: "no amount of engineering can prevent flooding", "it is an Act of God". (Hmmm ... so???).

In Singapore - In what way did Encik Yaacob Ibrahim as Minister for Water Resources and Environment and Mr Tan Gee Paw as Chairman of the Public Utilities Board take ACCOUNTABILITY for the freak flash floods? Whilst we would not deny the past credible contributions of Mr Tan Gee Paw in the 1970s, it was insensitive (to say the least) to choose 2010 (the year when we suffered a series of 4 flash floods in Jun-Jul) to award Mr Tan the Distinguished Service Order a couple of months later in Aug as part of the honour roll of National Day Award recipients. Does it epitomize galling audacity or brazen arrogance? Does it expose unbelievable political naivete?

In the UK - when they had the worst snowstorm in 18 years this wintry Christmas, what did Mr Colin Mathews as the CEO of the British Airports Authority (BAA) do? He apologized publicly and he also decided to forego his annual bonus for 2010. This is taking ACCOUNTABILITY for the freak snowstorms - even in the PRIVATE SECTOR! However, as BAA was sold to Ferrovial, a family-controlled Spanish construction group, the British Government were powerless vis-a-vis BAA as a foreign-owned company and the Civil Aviation Authority also failed as a regulator. [I just hope that the sale of our power stations in Singapore to various MNCs will not result in parallel fiascoes for Singapore in future.] Surprise, surprise ... no claims of "Act of God" from the British Government over the exceptionally heavy snowfall. Over this Christmas, it hit me that God has varying levels of accountability in different parts of the world! Poor God, He is not spared either.

More and more, it would appear that citizens have to "kow-tow" (bow) first to Big Business, then to Government. This is probably a natural trajectory as Government put the needs of Big Business over that of Citizens. As Big Businesses amass enough clout over time, they increasingly hold the power to call the tune in terms of jobs, resources, economic priorities and social values.

Whether you can afford to buy a roof over your head may well depend on how much holding power the developers have ... fully exploiting en bloc law to unlock land value for themselves, withholding redeveloped units for phased releases, holding investment units, attracting hot money inflows, concentrating vicinity land purchases to manage market pricing, facilitating consortium-like flipping and other forms of speculation, etc.

Going forward, Gahmen may well have little choice but to sing to the tune of Piper Developer! This is because having willy-nilly allowed the Singapore property market to ramp-up with a 3.5-hump mutant camel with sharper swings than even the Hongkong property
market (especially from 2007 to date), do you seriously believe the Gahmen have the chutzpah to wrangle and wriggle? Please refer to the graph of comparative regional property indices extracted from the Monetary Authority of Singapore's "Financial Stability Review" (25 Nov 2010):

With due respect, that's my Wikipeek take ... may we drink a toast to more Light and not just Heat in the New Year!

30 November 2010

Who to blame and shame?

The Macroeconomic Surveillance Department's "Financial Stability Review" released by the Monetary Authority of Singapore (MAS) on 25 Nov 2010 makes for interesting reading:
Property-related extracts: http://www.scribd.com/doc/44214510/Financial-Stability-Review-25-Nov-2010

1. Heart-thumping or heart-stopping? From the above MAS chart using CEIC Data Company Ltd’s source data, it would appear that the roller-coaster ride of Singapore’s property index was the most heart-thumping (to a flipper) or heart-stopping (to a home-buyer or genuine investor) compared with the other 4 countries, viz, Hong Kong, Taiwan, Korea and China.

Either you get the adrenalin rush as your heart beats race. Or you drop dead from heart attack ... you infarct (serially or acutely) as Gahmen pace-out the fart! To wit: Minister for National Development, Mr Mah Bow Tan, proclaimed in Parliament on 18 Oct 2010 that Gahmen will take "calibrated steps one at a time" so that they can "let the air out of the bubble".

Excuse me ... but what did The Man say a year ago? As reported in The Edge (14 Sep 2009) , Minister Mah said this when he announced bubble poopers at the time: "Given the current market conditions, the government has decided to adopt several measures to temper the exuberance in the market and preempt any speculative bubble from forming".

A Bloomberg columnist, Mr William Pesek, Jr, attributed it as a "Freudian slip" by Minister Mah at the time (Business Times, 17 Sep 2009). Mr Pesek also commented that "Mr 'We Can't Detect Bubbles' probably never thought he could learn a thing or three from an economy of 4.8 million people. This week, Singapore's National Development Minister Mah Bow Tan unveiled measures to prevent excessive price swings in the real estate market." Now that the CEIC data up to 3Q 2010 is out, I wonder if Mr Alan Greespan is sniggering whilst Minister Mah polishes up on the fart-pacing technique.

With 20/20 hindsight, could I now say the Oct 2007-Aug 2010 policy measures were bumbles in bumping bubbles? Could I also claim prescience and gloat "I told you so" in various blog postings from 2007 to date?

When I showed our Ah Beng a la Forrest Gump the Macroeconomic Surveillance Department review, the Hansard and the old newpaper reports of ministerial comments on Singapore's property market and the Gahmen's attempts to take "calibrated steps", this was what Ah Beng exclaimed as he slicked back his hair: "Wah, they so clever hor! They know how to si-mi 'cali', si-mi 'brake'. Then, how come got bubber hah? Don't know how to stop bubber before, meh? 2009 high, 2010 some more higher - the line cheong up leh! But they say no bubber mah. If no bubber, then why now come and talk about si-mi 'brake' after 398 days? Oi, '398' - nice number to start new gang - bigger number, sure can hantum '369'." Wow, has our local stand-up comedian, Hosan Leong, being outclassed or what???

Look at the above graph again. The excitement started in 2007. Singapore’s upswing was even SHARPER than Hong Kong’s (our green line cut over Hong Kong’s purple line). Continue to trace these two lines and it would show that our deep plunge became much STEEPER than Hong Kong’s when the crash came. In comparison, Korea was the most successful in keeping an even tempo after 2005 right up to the present (even the Korean graphical "mountain" from 2001 to 2005 had a much more rounded top than the sharp conical tops of the other countries' "mountains" in comparison).

2. Blame and shame. Does this point to Singapore’s policies being too PRO-cyclical (as opposed to being COUNTER-cyclical)? Does it mean that our Gahmen have failed to do their job in keeping things steady and on an even keel to the extent possible? How did Singapore end up on such a blistering roller-coaster ride with such wild swings and sharp yo-yo gyrations from 2007? Is it correlated to the en bloc frenzy up to 1H 2007? Singapore's meteoric upswings are already downplayed because data for en bloc sales are EXCLUDED from URA's property indices.

So who misled Minister Mah? Could Minister Mah be taking more flak than he deserved whilst others (eg, MinLaw, MOF, MOM, MHA) took cover even though they were equally culpable by their action (or inaction)? Were Minister Mah and Minister Shanmugam NOT listening? [Mah has oversight authority for land supply from Government Land Sales; Shanmugam has oversight authority for land supply from en bloc sales with double whammy effects of instantly and simultaneously shrinking supply and spiking demand.] Could both Ministers even hear? I ask that because Minister without Portfolio, Mr Lim Swee Say,
was probably describing his ministerial colleagues when he recounted the froggy anecdote in Parliament on 3 Mar 2010: "We are like the little frog, we are deaf to all these criticisms". To read about the froggy anecdote, please scroll to the Seventh Point in this blog posting: http://singaporeenbloc.blogspot.com/2010/06/lady-gaga-goes-aha-with-possibly-deaf.html

As a "lesser mortal" (as a PAP parliamentarian labelled us plebians), my squawks do NOT matter (my first squawk was in 1999 and I re-started in earnest since Feb 2007). But even the MAS and the IMF sounded their alerts. Don't their squawks matter?

In Nov last year, MAS cited in their previous Financial Stability Review the "risk of renewed escalation of speculative momentum", as reflected in paragraph C-2 of this blog posting:
http://singaporeenbloc.blogspot.com/2010/03/trilogy-part-c-pm-said-i-am-saying.html At around that time, MAS even conducted a survey entitled “Do you feel lucky, punk?” to suss-out property speculators' sentiments!

In my Mar 2010 blog posting -Paragraph C-3.4(k), I commented on URA's chart on Annual House Price and Rent Indices:

As it happened, a month later in Apr 2010, the International Monetary Fund (IMF) also released a Global Financial Stability Report cautioning that "by some measures, housing valuations are stretched. Although the average price-to-income ratio has risen modestly, in some markets - notably, China, Hong Kong, Singapore and Korea - price-to-rent ratios are 'elevated'. It adds that many purchasers have been buying 'in the expectation of price appreciation, rather than simply for dwelling purposes'" - Business Times (22 Apr 2010).

Who were responsible for the Private Property Price Index (PPPI) big yo-yo swings?

3. MinLaw/Singapore Land Authority (SLA) to blame. It is no coincidence or providence that the green line for Singapore in MAS chart 1.50 started the yo-yo gyrations only from 2007. The following collective sales chart documents the most frenetic bout of en bloc sales from 2006-1H 2007. Although en bloc sales are EXCLUDED from PPPI, I reckon that there is a correlation. Why? Because en bloc slosh (or slush) would consequently feed into the PPPI after due lag time, especially when most en bloc sales were typically driven by flippers on the Sale Committees. Slush monies from such flips took on their own momentum, spinning off into more new sales, sub-sales and resales (whether with en bloc potential or otherwise and exuberant Cash Over Valuations where displaced condo owner-occupiers downgrade to HDB post-en bloc). The only respite was from 2H 2008 to 1H 2009 due to the Great Recession with inherent real estate laggard effect.

4. MinLaw/SLA failure in land supply management. Land supply in Singapore comes from two sources: Government Land Sales and en bloc sales. Gahmen could tweak land supply in Outside Central Region (OCR) and parts of Rest of Central Region (RCR). But in its tool box for Core Central Region (CCR), especially for districts 9 and 10, Gahmen are helpless and hapless. Gahmen do NOT have any sizeable CCR residential land (other than the newly created Sentosa pocket) for it to directly affect supply side of economics.

Yet what did MinLaw/SLA do? One word: Nothing. MinLaw/SLA stood idly by as swathes of CCR and some parts of RCR fell to en bloc sales, starting from 2005 until the frenetic peak during 1H 2007, resulting in triple whammy effects that adversely affected Singapore's competitiveness (viz, property purchase and rental demand both shot up, property supply plummeted down, competition for construction materials/labour spiked up).

MinLaw/SLA failed to consider alternative measures to indirectly influence supply and to ensure constructive destruction where redevelopments would be poised for renewable energy solutions in the coming decade, eg, creating en bloc quota by region and by type, incentivising plot amalgamation, etc. These suggestions were ignored by MinLaw/SLA (who incidentally didn't or still couldn't come out with other ideas to date) as it would have required MinLaw/SLA to break out of their silo mentality and cross boundaries to work with Ministry of National Development (MND), Urban Redevelopment Authority (URA) and Building and Construction Authority (BCA), and vice versa. Regrettably, I reckon that organizational structure issues and inter-ministry/agency competition prevented synergy whilst the singular common drive towards GDP Growth that determines GDP bonuses eroded institutional cross checks-and-balances. Double troubles, ugh?

MinLaw/SLA were probably under the misconception that such en bloc quotas, plot amalgamation incentives, etc, would be taken as tinkering with demand side of economics and hence taboo to MinLaw/SLA. They were unable to draw the same parallels as the Land Transport Authority (LTA) who correctly saw the Certificate of Entitlement (COE) quota system for vehicles as road use management (rather than vehicular demand-side meddling).

That, I reckon, was how MinLaw/SLA failed to manage land policy in CCR and parts of RCR. Failed to preempt ... failed to react ... and still sitting pretty on their hands up to this day!

5. MinLaw/SLA failure with en bloc law. The Land Titles (Strata) Act (LTSA) governing en bloc sales was incepted in Oct 1999. Even after two rounds of legislative finetuning in Oct 2007 and Jul 2010, MinLaw/SLA have failed to meaningfully re-calibrate and revamp the structurally flawed law, typically taking two baby steps forward and one sweeping leap back. Hence:

- LTSA is structurally flawed in many ways. To have a grasp of the legislative provisions, please read the following two blog postings:


- LTSA even made en bloc public tender process contradictory to the best practices enshrined in Government Land Sales ("GLS") with (i) back rooms for private treaty negotiations, (ii) side doors for private sale and (iii) amateur volunteers empowered as Sale Committee to sell-first-and-tell-later - basically, a legalized scam!
For a skeletal understanding of GLS, do click on the following blog posting to appreciate how Estimated Market Value under GLS is zealously guarded by only IRAS Chief Valuer up to 12 noon on public tender close date (whereas en bloc Reserve Price is known by hundreds for up to 12+12=24 months) and NO private treaty talks in back-rooms are allowed post-public tender even when the Gahmen as seller is represented by well-paid big guns in URA, SLA, JTC or HDB (as opposed to Sale Committee volunteers signing multi-million or billion dollar private treaties with Developer-buyer AFTER FAILURE OF PUBLIC TENDER based on a Reserve Price that was set up to 12+12=24 MONTHS AGO under the guidance of en bloc agent/lawyer who are both operating on NO-SALE-NO-FEE basis!!!):

- LTSA is Pro-Developer (which by extension is therefore Anti-Owners). For elaboration, please read paragraphs 8.1 and 8.2 of the following blog posting:

- LTSA is not counter-balanced to "do right" by the Owners. For specific negotiation points and actionable measures at three critical milestones of en bloc process, scroll down to paragraph 2 in the following blog posting:
Although the Civil Service's mantra is that "no one has the monopoly of wisdom", MinLaw probably think they are the exception. Despite en bloc models of one-for-one (1-4-1) exchange in South Korea and Taiwan and more sustainably calibrated en bloc laws in Hongkong, MinLaw continue to be INCAPABLE of tapping (or UNWILLING to tap) other countries' best practices and customizing them to suit Singapore's context. Again, MinLaw are doing NOTHING.

- Upon demolition, LTSA unlocks land value for Developer-buyers (NOT extant Singaporean Owners), viz, post-en bloc:
For Owners: 2X Price or ½ Size
For Developers: 2X Price and 2X Size

For "Before" and "After" en bloc comparisons, please check out the numbers in the following bloc posting:
Similarly, MinLaw are INCAPABLE of publishing (UNWILLING to publish) comparative data pre- and post-en bloc (estate-by-estate with dates for en bloc vacant possession, redevelopment sales launch(es), expected/actual Temporary Occupation Permit) with broad breakdown of (i) land cost (segregated into en bloc aggregate purchase price, en bloc sales proceeds for each size/type of units, development charge/differential premium/stamp duty), (ii) construction/materials cost, (iii) financing/marketing/professional cost and (iv) sales proceeds for the number of units and sq m sold to date and the number of units and sq m unsold/to be launched to date. Such broad categorical breakdown would NOT compromise the sensitivity of competitive business data. To date, there is NO STATISTICAL ACCOUNTABILITY in MinLaw's web-site compared to the wealth of data available in URA's web-site. Yet again, MinLaw are doing NOTHING. Perhaps MinLaw believe that they not only have the monopoly of wisdom but they are also beyond accountability, eh?

- Upon redevelopment, LTSA caters for housing preferences of Permanent Residents/Foreigners for sleek and swanky condos in central locations at the expense of Singaporeans' sense of rootedness/community, viz, post-en bloc:

Displacements: Largely Singaporeans. Reason: PR/Foreigner deluge was recent. Business Times, 27 Nov 2010: Citibank economist Kit Wei Zheng said "Singapore's population rose by more than 800,000" during 2005-2009. Singapore's version of "rich IDPs" (Internally Displaced Persons - that's what they are called from Serbia to Somalia and beyond) would typically end up as Squatters, Refugees, Downgraders or Downsizers post-en bloc.

Replacements: Two-faceted proportions ...
– Higher proportion of investor-owners (whether PR/foreign or local) than owner-occupiers - as recently commented by various property marketing experts (Today, 6 Nov 2010) and congruent with my previous posting about Casino Singapore turning into a nation of flippers (en bloc sale, sub-sale, resale). [I reckon data gaps and less astute statistical cuts camouflage the extent of flippers/investors - be it local/PR/foreigner, occupant/owner, private/public housing.]

– Higher proportion of PRs/foreigners for new purchases. Whilst the proportion of local owners will continue to be higher than PR/foreign owners in total, I reckon the proportion of new purchases by PR/foreign buyers will likely reinforce the SAME TREND shown in charts published nearly 3 years ago in Business Times (27 Mar 2008), as commented in paragraph 3 of the following blog posting [BTW, keen observers of Singapore know that statistics have a way of "never appearing again" if the picture painted is NOT what the Gahmen fancies]: http://singaporeenbloc.blogspot.com/2009/03/executive-legislative-judiciary-sans.html

Based on the above "Profile of property buyers by nationality" (EXCLUDING en bloc sales - that asterisked footnote intrigued me until I got it clarified that the exclusion related to foreign developers' en bloc purchases), Business Times (24 Nov 2010) reported:
Malaysians - 21%
Chinese - 20%
Indonesians - 20%
Indians - 14%
So that means the remaining "Others" category makes up a whopping 25%, ugh? Rich riff-raff from A-Z ... Arabs, Filipinos, Koreans, Russians, Uzbeks, Venezuelans, Zambians.

6. MinLaw tardy in tightening Residential Property Act (RPA). MinLaw was far behind the curve in catching up with this tightening exercise of RPA. MinLaw acted long after the floodgates were opened in 2005-2009 by MOM and MHA for newly minted citizens who would have capitalized upon their entitlement to buy landed property. Yeeha ... the horse was way out of the barn a long while ago from 2005-2009 by the time the rancher swaggered towards the barn door to tweak the door screws towards end-2010. Still, it was better late than never.

In respect of Developer-buyers, I am heartened that finally one more of my suggestions NOT to allow en bloc Developer-buyers to land-bank seemed to have been accepted. Under the Nov 2010 amendment of Residential Property Act which will likely come into effect within the next month or so, foreign housing developers with Qualifying Certificates (effectively all listed developers) would be required to complete the projects within the stipulated Project Completion Period (PCP), failing which they would lose their 10% bankers' guarantee for land cost and incur extension fees of 8%, 16% and 24% of land price for, respectively, the first, second and third/subsequent year of extension.

However, in my plebian opinion, PCP of 5 years from SLA's approval of residential en bloc purchase is still way TOO LONG and INCONGRUENT relative to such transaction's DOUBLE-WHAMMY IMPACT of deadly IMMEDIATE CORRELATION (viz, supply shrinkage and demand pumping), bearing in mind the additional 2-year window for Developer to dispose of all units. I'd suggest that for en bloc purchases, PCP should be SHORTENED to three years to ensure immediate redevelopment with PRE-disQUALIFICATION from future extensions or waivers granted by MOF/MND.

(A) One of LTSA's purported SECONDARY objectives was for higher land-use intensity, as proclaimed in Parliament in 1999. Therefore, there is NO JUSTIFICATION to allow Developer-buyers to landbank via en bloc purchases by displacing owner-occupiers/tenants. Going forward, Gahmen should NOT under-estimate Developers' new-found power to control supply and demand with their much strengthened holding power after 2009-10 historical record net profits (eg, delay substantive phased releases for sale after recouping land cost at very achievable break-even, deeper pockets to outlast regulatory impact and shortened market cycles, more intense en bloc predation, etc). The subtleties of the underlying game rules may have already morphed under the regulatory nose before the next Ha-choo splattering sneeze (or the next sulphuric Phoooot flatulent release of the bubble)!

(B) With the top-class efficiency of URA/BCA and other technical agencies, building plan approvals could be obtained within 7 working days from application. Hence, three-year PCP is adequate to obtain Temporary Occupation Permit.

(C) Past track record of PCP and sale disposal extensions by MOF/MND should no longer be available as future loopholes for en bloc purchases which must be pegged to a stricter regime because of displacement impact and purported national objective.

7. MOF/IRAS played scaredy-cat. In Jun 2009, IRAS held a Public Consultation on their proposed tax clarification on property trading (viz, the profit from the sale of only one property on/after 1 Jan 2010 will not be taxed if the individual owner has not disposed of any other property within 4 years prior to such sale). Whilst the proposed tax clarification would not eliminate review on a case-by-case basis upon tax-payer's appeal, it would likely boost IRAS' success rate in nabbing instances of tax evasion
from property trading. After such Public Consultation, IRAS backed down in Jul 2009 and retracted the tax clarification! And the property market continued its ramp-up.

Instead of being a case of "better late than never", IRAS is now a clown fast becoming a laughing stock with the benefit of hindsight. Whoever was the genius in IRAS who proposed the tax clarification must be feeling validated and vindicated. Whoever was the person instrumental in retracting the tax clarification ought to be sacked! Maybe it was the same person. Well, we will never know. The decision was probably a committee, a study team. No doubt, all of them will get their highest bonus ever for 2010.

There is clarity in fuzz and fuzz in clarity – a la Singapore style Civil Service. Everyone is responsible but no one is held accountable.

Ditto for the question I raised as to why MOF did not see it fit to selectively and immediately withdraw and/or clawback the 2009 Resilience Package benefits from developers (eg, Job Credit Scheme instead of including this industry in its extension through Jun 2010) as their sparkling quarterly financial results were progressively released from 2H 2009 with triple-digit or high double-digit percentage increases in net profit. This poser was made in the following blog posting:

8. MND/URA/BCA bending backwards for Developers. It may be of interest to read the mind-boggling backflips that URA/BCA under the umbrella of MND did for the benefit of Developers - please refer to the following blog postings:
Paragraph 4: http://singaporeenbloc.blogspot.com/2007/12/in-coming-year.html
Paragraph 7: http://singaporeenbloc.blogspot.com/2010/03/foxes-outfoxed.html

Here's a recap of various policy initiatives (to be fair to MND, these were jointly announced with MOF and MAS if there is comfort in common misery). This would enable you to evaluate if our Gahmen were effective and/or timely or they were "too little, too late":

26 Oct 2007: Withdrew Deferred Payment Scheme.
BUT forgot about Interest Absorption Scheme (structurally different in terms of bank risk but effectively the same in terms of buyer's upfront commitment and eventually withdrawn two years later in Sep 2009) AND delayed effective date by pegging withdrawal to date of building plan approval (instead of, say, date of option to purchase, offer to purchase or sale and purchase agreement, whichever is the earliest, bearing in mind that this withdrawal was purportedly targetted at flipper buyers, not developer).
Nov 2007 blog posting - end of Section C:

Wrote to MinLaw/MND ... Dec 2007 blog posting - Paragraph 4:

14 Sep 2009: Withdrew Interest Absorption Scheme.
BUT again delayed effective date by pegging withdrawal to date of building plan approval (instead of, say, date of option to purchase, offer to purchase or sale and purchase agreement, whichever is the earliest, bearing in mind that this withdrawal was purportedly targetted at flipper buyers, not developer).

14 Sep 2009: Prohibited Interest Only Loans.
BUT the question arises as to whether this type of product should even be allowed at the outset because such "balloon" loan structures are financially imprudent from the word "go", especially when CPF retirement savings are sanctioned for residential property purchases.

14 Sep 2009: Announced reinstatement of Confirmed List for 1H 2010 Government Land Sales programme after this was suspended in Oct 2008 in the aftermath of unprecedented meltdown and credit freeze globally.

6 Nov 2009: Announced Government Land Sales programme for 1H2010.
BUT deviated from the traditional norm of such announcements in Dec because Business Times reported on 7 Nov 2009 that “according to Urban Redevelopment Authority (URA) land sales and administration senior group director Choy Chan Pong, the market has been waiting for updates since National Development Minister Mah Bow Tan said in September that the confirmed list would be reinstated. 'Since people say there is some anxiety about housing supply, it's better to tell people now,' he explained.” [Yet again, another tell-tale sign of how close and responsive the regulators (eg, URA) are to the regulated corporates (eg, REDAS)!]

20 Feb 2010: For all housing loans, decreased Loan-to-Value from 90% to 80%.
BUT made no distinction between borrowers with no or multiple outstanding housing loans until six months later in Aug 2010.

20 Feb 2010: Introduced Seller's Stamp Duty if property is sold within one year from date of purchase.
BUT because one-year holding period was so patently inconsequential relative to the typical three-year period for obtaining Temporary Occupation Permit, this was extended six months later in Aug 2010.
Wrote to MinLaw/MND ... Mar 2010 blog posting - Paragraph C-3.4(j):

Let us pause here. After a lag of more than six months, the effects of the 14 Sep 2009
measures by our world-class Gahmen should have kicked-in by 1Q 2010, eh? But it sure looks like they weren't cutting it based on the following residential property indices as of 1Q 2010 (Business Times, 2 Apr 2010):
HDB resale flat price index: 154.9
URA private home price index: 174.2

Next, we patiently plod on and see if the 20 Feb 2010 slew of measures got more
effective when given another four months to do the trick. Again, it ain't working according to the following residential property indices as of 2Q 2010 (Business Times, 2 Jul 2010):
HDB resale flat price index: 160.9 (up 6)
URA private home price index: 184.1 (up 9.9)

Oooops ... a little "pai seh" (awkward), eh? So they trotted out more bubble poopers as their weaponry on 30 Aug 2010. The day after the following additional measures were announced, a Jones Lang LaSalle property expert was quoted in press reports that "the current measures have been introduced a tad later than expected". [Again, keen observers of Singapore would notice that if the comment is even remotely critical, it would be quoted anonymously. This is probably indicative of outsiders' "fear factor" and/or insiders' "fragility factor" (as fragile as eggs that one has to handle with such care - Hmmm ... does that make them eggheads then?] My sentiments exactly, as a NON-industry expert, although "a tad" is a bit of a big understatement!

30 Aug 2010: Adjusted Seller's Stamp Duty to extend holding period from one year to three years if property is sold within three years from date of purchase.
BUT given that (i) real estate investment is conventionally rated as "long term commitment", (ii) construction period is already three years and (iii) most people don't move house every three years, it makes one wonder if it would send a more representative signal with ten-year period on a declining tax scale. Eg, full SSD rate (1% for first $180k of consideration, 2% for second $180k, 3% for remainder) for first five years and a one-fifth reduction of full SSD rate for each of the next 5 years.

30 Aug 2010: Where there is one or more outstanding housing loan, (i) increased cash payment from 5% to 10% of valuation limit and (ii) decreased Loan-to-Value (LTV) from 80% to 70%.
BUT there are workarounds to qualify for lower cash payment and higher LTV, as the Chinese and Hongkong authorities already know (which explains the strict qualifying criteria China imposed on foreign investors in Nov 2010) and it is therefore unlikely that our Gahmen doesn't.
ALSO, in Singapore's context, because CPF savings are involved, a higher standard of financial prudence should be imposed at both ends of the buyer spectrum: (i) Mickey Mouse units and (ii) super deluxe units. In real estate market terms, shoe-box units with closet-size bedrooms and suitcase-size closets are the equivalent of penny stocks in the share market. CPF savings cannot even be used for penny stocks. Since CPF savings are available for shoe-box units sold at astronomical per sq ft price, higher cash outlay and lower LTV may inject more financial discipline. As total outlay for super deluxe units is significant which translates to higher leverage risk with possible adverse implications for our banks in a fall-out, an acid test for genuinely qualified buyers would be higher cash upfront and lower LTV too.

30 Aug 2010: Housing Development Board (HDB) tightened the pegs for non-subsidised public housing flats by (i) increasing the Minimum Occupancy Period (MOP) from three to five years before it can be available for resale or sub-letting and (ii) barring owners from concurrently owning both HDB flat and private residential property during such MOP. Also, private property owners who buy a non-subsidised HDB flat must now dispose of their private residential property within six months from date of HDB purchase. Ownership of private properties by HDB lessees will be allowed after MOP.
BUT given the differential between public housing flats and private condos ranges from 20% to 2000%, depending on size, age and location, it raises the question if a five-year MOP qualification is incongruent without further correlation. Example: If a person qualifies for two bites of the cherry with subsidized public housing at $xxx based on household income, and that same person is then able to buy a private condo at 4 times $xxx from the 6th year (assuming that he/she did not strike the lottery/jackpot in Casino Singapore or was promoted to ministerial rank in the 5th year of MOP), what is really going on (not forgetting that continuing HDB occupation is easily circumvented and not readily detected)?

There are other factors at play (eg, data gaps and data integrity issues arising from SLA's
super business-friendliness over caveat lodgement). I reckon there are Rubik dimensions to this trend of "super business-friendliness" by regulators. These were mentioned in the following blog postings:
Paragraph 4: http://singaporeenbloc.blogspot.com/2010/11/casino-singapore-part-1-whos-idiot.html
Paragraph 6: http://singaporeenbloc.blogspot.com/2010/11/casino-singapore-part-3-whos-idiot.html

9. What's next? There is a lot of market chatter out there. More announcements are expected in upcoming Budget Day in Feb 2011, depending on, I suspect, (i) the impact of upcoming American Quantitative Easing exercises with carry trade implications, (ii) the extent of economic/financial woes of the weaker EU members and (iii) the astuteness and timeliness of other Asian governments in regulating their respective property markets and capital flows relative to our own.

Another spanner-in-the works is the potential spectre of "ghost condos" (equivalent to "ghost towns" in parts of Southern California and Nevada in the aftermath of sub-prime crisis). This is because of (i) "significant completions of luxury properties from 2010 to 2012" (Business Times, 15 Nov 2010: Mr Ku Swee Yong, International Property Advisor), (ii) "the bulk of supply ... in mass and mid-end markets will be completed in 2013" (Today, 6 Nov 2010: Mr Donald Han, Cushman and Wakefield), and (iii) coupled with the fact that "the proportion of owner-occupier purchases has come down significantly, so the supply of rental units is actually greater" (Today, 6 Nov 2010: Mr Colin Tan, Chesterton Suntec International). I believe the authorities are wary as there are already some initial signs although the industry naturally wouldn't highlight it as that would be cutting its nose to spite its own face!

It would be interesting to see if MAS concerns in the Financial Stability Review 2010 will be heeded: "current global conditions of flush liquidity and low interest rates may lead to upward pressures on domestic asset prices ... there is a possibility that transaction activity and prices could pick up again".

We should note Finance Minister Tharman's parliamentary assurances on 22 Nov 2010 that "we are concerned about property prices rising too quickly too far, and our three rounds of measures so far have been aimed at injecting some stability in that process". He also asserted that "we are not contemplating introducing capital controls, but will continue to rely on a range of policy tools to ensure that capital flows do not threaten financial stability or cause a property market bubble" and that "by and large, Singapore's financial system has a way of intermediating the inflows, so what is not needed domestically tends to get recycled overseas".

Let's pray that William A Fleckenstein will not see it fit to write about "Singapore's Bumbles" in the same way that he wrote about “Greenspan’s Bubbles”.

Ah Beng a la Forrest Gump noted as he sauntered off: "No need to si-mi 'brake'. Just make very the sure from beginning no bubber hor. Buay tahan ok!" Ah Beng, Ah Beng, you can't stand it? Do you think the rest of us can stand it?