18 March 2010

Trilogy: Part A – President said, I said

How Time flies! Riding the mutant three-hump camel in my Oct 2010 blog entry, I marked the 11th anniversary of en bloc law in Singapore. Sobering thought, eh?
A-1 Yesterday, Today, Another day. Cyber-nostalgically, I recently re-read my old blog entries.

2007: I first invoked the idea of “doing right”, as distinct from “being right”. I re-traced the etymology of “Dào Lǐ“– 道 理 about a month after the LTSA legislative amendments came into effect as per my blog entry in Nov 2007: “I reckon that if Singaporeans see the Gahmen as ‘doing right’, as opposed to ‘being right’, there would be a lesser degree of dissatisfaction and disenchantment. This en bloc phenomenon is a CLASSIC CASE STUDY of how the Gahmen is ‘being right’ but is NOT ‘doing right’!!!”

For the next two years, I repeated this essential distinction ad nauseum (in much the same way that  MinLaw also repeated the 80% (90%) en bloc super-majority ad nauseum - hee, hee ... we all have our respective pet peeves, eh?):

2008: http://singaporeenbloc.blogspot.com/2008/08/en-bloc-why-it-is-not-right-for.html

2009: http://singaporeenbloc.blogspot.com/2009/03/executive-legislative-judiciary-sans.html

Hence, it was with a sense of déjà vu as I read the Los Angeles Times report (16 Mar 2010) about President Barack Obama’s latest spiel on America’s healthcare reform bill: “Obama said. ‘It's been such a long time since we made government on the side of ordinary working folks, … I don't know about the politics, but I know what's the right thing to do, … I want some courage. I want us to do the right thing’.”

Whoa … it is so, so validating to realise the universality of this idea of “Doing right”, “to do the right thing”.

Maybe, just maybe, our Gahmen will “do right” by us condo owners with the dawn of a new day, eh? Hope reigns eternal!

A-2 Looking back. Hindsight is precise science. I lay no claim to prescience and I take no pleasure in hooting: “I told you so”. To date, my three projections have come to fruition (viz, DPS/IAS, Bagel Class, Roti Kahwin fusion syndrome) and my 4th and 5th projections (viz, foreign-ethnic enclaves and reverse engineered en blocs, respectively) are likely to be affirmed unless policy action is taken soon, I reckon:

(a) In my 24 Dec 2007 Christmas Eve blog entry (para 4): I posted a blog entry that drew an analogy between (i) the then withdrawn Deferred Payment Scheme (DPS") and (ii) the morphed Interest Absorption Scheme ("IAS") as being the equivalent of "half cati, eight taels”. Despite highlighting this, it took MND almost two years to ban Interest Absorption Scheme on 14 Sep 2009 after it withdrew the Deferred Payment Scheme on 26 Oct 2007! http://singaporeenbloc.blogspot.com/2007_12_01_archive.html

(b) In my 29 May 2007 blog entry: I projected an evolving “Bagel Class” of Singaporeans because en bloc sales would result in two holes, the first hole is affirmed by URA statistics published in Business Times, 27 Mar 2008, where foreigners are displacing Singaporeans’ share of new property purchases, especially in prime/choice locations. http://singaporeenbloc.blogspot.com/2007/05/in-between-evolving-bagel-class-of.html

(c) In the same 29 May 2007 blog entry: I noted that there would be an unhappy “Roti Kahwin” fusion syndrome. This would arise when the “Sandwich Class” of HUDCers/Exec Condoers (those who did not qualify for HDB flats but who could not afford private property) would need to revert to the "Roti Kaya Class" (bread with local coconut jam) of HDBers. It would not be a happy "Roti Kahwin" (bread with a marriage fusion of butter + coconut jam) when the ex-HUDCers/Exec Condoers start competing with Real McCoy Heartlanders for HDB public flats!

The Roti Kahwin impact may not be numerically massive in the overall scale of HDB resale transactions, bearing in mind the deluge of foreign immigrant influx in 2008-09. However, it cannot be denied that a few transactions of excessive Cash-over-Valuation (“COV”) would set a new benchmark and thus trigger an upward spiral, eh?

According to Channel News Asia (5 Mar 2010): “Mah said that in 2009 there were 58 cases where COV exceeded $70,000. And only eight cases, or 14 per cent, involved PRs. Another 19 per cent, or 11 cases, involved PPOs (private property owners).”

How the stats are sliced and diced often result in different kaleidoscopic formations, eh? Minister Mah must have good reasons for citing these 2009 statistics. However, I reckon that it would have been more insightful if the good minister used the 2007-08 figures instead. Hmmmm (scratch, scratch - my head, of course; where else?) ... Didn't the last en bloc bout start to stir in 2005 and then became most frenetic in 2006-07 before fizzling out after mid-2007? Ahhhh (stroke, stroke - my chin, lah) ... Wouldn't that mean en bloc pay-outs would most likely span from 2007-08 (bearing in mind that only a handful of estates won their legal battles and most did not pursue their battles beyond Strata Titles Boards’ (STB) level)? Now ... are your eyebrows furrowing? Oh dear, soon you will need Botox - sorry, you won't be able to afford those jabs after your en bloc shot (or shock)!

Maybe ... it's time for us to read "old news"!  After all, it may not be moronic despite being oxymoronic, eh? Elephants, unlike horses, have better memory because elees (especially old matriarchs) have higher EQ than horses. Nah, EQ is not Emotional Quotient in this context. It is Encephalization Quotient (elees' 1.88 score compared to horses' 0.86)! Of course, I am dead serious!!!  Why would I pull your leg?  Or the elees' shapeless clumpy legs? Or the horses' powerful athletic ones!  No fun being elee-trampled or horse-kicked, I tell you. Trampled or kicked, I'd likely end up dead (and not dead serious)!

Here's some pertinent "old news" from two years ago (in case Minister Mah is also interested) – Business Times (27 Mar 2008): “Also, the booming stock market and the spate of collective sales in the private property market have unleashed a group of cash-rich house hunters, many of whom are opting for high-end resale HDB units. This group is willing to pay top dollar for flats that fit their criteria. … Such highly publicised transactions have kept the HDB resale market in a state of euphoria since the middle of last year. Many hopeful sellers hiked asking prices overnight, with some demanding as much as $200,000 COV. … According to HDB's Q4 2007 numbers, the median COV for a five-room HDB resale flat in Sengkang was $23,000; compared to $79,000 for a similar flat in centrally located Queenstown.”

Although HDB web-site only provides median COV as opposed to excessive COV which Minister Mah cut at $70k, it is nonetheless telling. The median COVs for 4-room to Exec Condos (ex-condo owners are not likely to go for low-end 1-3 room HDB flats even as they downgrade to public housing) for nearly two years (3Q 2007 through 4Q2008) consistently exceeded the median COVs for these same categories of flats for nearly the whole of 2009. Now, doesn't that support my assertion that the kaleidoscopic view of 2007-08 numbers would be quite, quite different from Minister Mah's 2009 portrayal? Ooopsie ...

Minister Mah also cited that 19% involved private property owners. It is unknown how these statistics were cut (eg, in some cases, en bloc condo seller may be the patriarch but HDB replacement buyer may be his children upgrading from an existing HDB flat and wanting to benefit from CPF housing grant or some perk).

Perhaps, in line with the Gahmen ethos of “free market forces in a dog-eat-dog world” and “leaving us to the dogs” (after all, we are over 21, we should know what we were doing when we merrily agreed to en bloc and signed Collective Sale Agreement (“CSA”)), I suspect that the Singapore Land Registry ("SLA") did not even bother to gather data on what happened to the en bloc owners as bank mortgages/CPF charges got discharged after SLA registered the collective sale applications/orders.

Although I had suggested to the authorities around mid-2007 to collate such data, it probably fell on deaf ears.  Hence, there probably exists a gaping hole in SLA database in this respect at present.  So, as an alternative, they are using excessive COVs paid in PPOs' purchases of HDB resale flats as a proxy, I guess.

With all the purported “en bloc windfalls” sloshing around in the system, where did the flow-through go? If the Gahmen know, they ain’t saying nothing yet!

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