The birds may fly away if you do ...
C-1 PM's speeches/comments. In 2007. In 2008. In 2010. Our PM has been talking and talking.
- Sep 2009 (1.5 months later): Gahmen reversed two "speculation facilitation" measures (viz, withdrawing Interest Absorption Scheme and prohibiting Interest-Only-Loans).
- Nov 2009 (about 2 months later): Ministerial perception that speculation is under control. [CNA (24 Nov 2009): Minister Mah said, “We want to curb erratic spikes in prices due to excessive speculation, inaccurate information or market manipulation". Mr Mah added that the measures introduced in September have also helped to control speculative activity."]
- Feb 2010 (almost 3 months later): Whole government machinery scrambles almost unbecomingly to roll-out Seller’s Stamp Duty, even having to resort to a Certificate of Urgency in Parliament.
It is all the more perturbing when one contextualizes the ministerial comments in Nov 2009 vis-à-vis the Financial Stability Review released by the Monetary Authority of Singapore (“MAS”) also in Nov 2009 about the "risk of renewed escalation of speculative momentum": “Sub-sale transactions as a share of all transactions, a proxy for speculative activities, averaged 11% over Q2 and Q3 2009, which was below the peaks seen in 1996-1997 but close to the 13% average seen during the buoyant property market in 2007-2008. … As Singapore emerges from recession and with the market expecting low interest rates to persist for some time, the risk of a renewed escalation of speculative momentum cannot be discounted."
Opportunity in Adversity. If we don’t get this right, then we’d have missed the opportunity of converting the silver tsunami of senior citizens into a golden lake of sustained domestic consumption by senior citizens as an integral part of our island's economic vibrancy (and not a bunch of grumpy old folks, fearful of spending their last pennies in Singapore, with some being shipped off to JB/Batam nursing homes, worried over their chronic healthcare costs and resentful of the growing social divide in a country which they helped to build from not very much).
C-3.4 Context, my dear, Context. In addition to Behavioural Economics coming into play, the following Additional Factors need to be contextualized into the whole scheme of things, as it were – something that I hope will not be lost on the Executive, the Legislature, the Judiciary, the Civil Service:
(f) Demographic seismic change. Singapore’s seismic change in demographic profile started in 2000. Our number of senior citizens age 65+ is set to rival Japan soon. By 2030, Singapore is projected to have 873,300 seniors, comprising 18.7% of our resident population (2006 report by the Committee on Ageing Issues). http://www.mcys.gov.sg/successful_ageing/report/CAI_report.pdf
(j) Policy disproportion and inconsistency. HDB flats are about 50%-400% cheaper than private condos (excluding the super-deluxe category). Recent HDB announcements deemed it as speculative if non-subsidized HDB flat purchases are sold within three years (subsidized purchases, within 5 years). However, for private condos that require much higher capital outlay, disposal within one year is deemed speculative.
Although purchasing power is significantly different between HDB heartlanders and private property owners, the even greater price variance between these two property types would neutralize this factor. Hence, doesn't it point to a POLICY DISPROPORTION AND INCONSISTENCY when HDB disposal time-bar is 3/5 years whereas private property time-peg for deemed speculation is a mere 1 year?
In any case, such presumption of purchasing power differential between HDBers and private property owners may NOT hold water any more after the 2006-07 en bloc and 2007-008 sub-sale frenzies – Mainstream media reported on 13 Mar 2010 that in the process of checking illegal sub-letting of HDB flats, it was discovered that the perpetrator (a mere housing agent) in fact SIMULTANEOUSLY own 5 more private properties in addition to the HDB flat! Although this may be more an exception than the rule, it may not be that rare for HDBers to own private condos if the authorities are astute enough to slice their statistics based not just on HDB owners but also occupants!