I will use the familiar term “bubble” as a shorthand, but note that it confuses cause with effect. A better, if ungainly, descriptor would be “asset-price hyperinflation”—the huge spike in asset prices that results from a perverse self-reinforcing belief system, a fog that clouds the judgment of all but the most aware participants in the market. Asset hyperinflation starts at a certain stage of market development under just the right conditions. The bubble is the result of that financial madness, seen only when the fog rolls away.
Everything is a cycle, even financial markets which is determined by Demand and Supply, where the participants are you and I, which is linked to the population’s age groups, the number of young, middle-age and the old, and fundamentals of business cycles and processes for demand and supply of goods and services. Let me make myself clearer, there will be boom times, and down times which is caused by an imperfect market, the herd instinct where baby boomers start work, get married and buy a home, where they are the pillars of the economic boom, and a time when they grow old and retire, becomes unproductive and needs to cash out their retirement funds, but when all start doing at the same time, chaos will follows.
If you understand my logic, you will understand why high GDP growth never last forever, unless there is sustainment in innovations and productivity, where a revolutionary invention could prolong this from happening, where there is high growth there will definitely be a slowdown when the population ages. Therefore it is very important you must prepare for it. Spread out the effects caused by the slowdown, tweak policies to make sure there is renewal of innovations and productivity, renewal of the population.
I am 100% certain when baby boomers retire, there will be a huge lost of productivity, and unless there is renewal of the population, a slowdown of high GDP growth also, and if it is not managed properly, a bubble will form when the markets cannot support the high growth, there will be many sellers but no buyers, then the dangers of a crash, which may occur within the next twenty years.
– Contributed by Oogle.
Singles, I Hear You
Since I joined MND last year, I have often received suggestions and feedback from Singaporeans that HDB new flats should also be made available to singles. Currently, they (above 35) can only buy resale flats, but not new HDB flats.
To these requests, I have routinely given an interim reply: I hear you. I know your wishes to have a roof of your own. But let me tackle the more urgent needs of the married couples first, especially the first-timers.
I am grateful that the singles have been patient and understanding. Thank you.
Last year, I focused attention on the first-timers and we have produced good results.
I have now begun to focus on second-timers. These are still early days, and results will take a few more months to show. This means going into next year. But I am confident that we will have results to show eventually.
This has allowed me to begin to think about how to address the singles’ housing needs.
Since PM’s ND Rally, many more comments and suggestions have surfaced.
Some are quite sound. For example:
– Allowing singles to buy BTO flats should not be at the severe expense of married couples;
– There must be some restrictions on the type of flats that singles are allowed to buy;
– Singles should not be allowed to rent out the flats;
– If two singles with 2 BTO flats subsequently get married, one of the flats should be sold;
– There must be a difference between the subsidy received by a single and a married couple.
There were other suggestions.
– The flats sold to singles should be of shorter lease and longer MOP;
– A higher (than 35) age threshold should be imposed on such BTO applicants.
Property analysts have added to the debate, commenting on the impact of such a policy on the resale market, and in particular on the “shoe-box” market.
I am glad that many Singaporeans have given thoughts to this topic. That is the value of such national conversation, creating a forum for interested Singaporeans to share their views and suggestions on a common topic. The Government cannot obviously accept all suggestions, but the informal nature of the consultation allows all views and ideas to be aired and duly considered.
I will continue to mull over this issue. In any case, I cannot hurry too much as firstly, I need to focus on the immediate needs of the second-timers until they are largely addressed next year. Secondly, I want to have a better handle over the likely additional demand on new HDB flats when we open the scheme to singles. The additional demand is unlikely to be small and if we misjudge, the interests of the married couples, especially those with children, may be adversely affected.
I suppose one practical approach given the difficulty of assessing demand, is to adopt an incremental approach to implementation. We can start the scheme with some initial restrictions (e.g. on flat type). This way, we can better ensure the scheme meets the needs of the singles, while still protecting the interests of the married couples.
Another logical way is to launch a larger number of BTO flats next year. Question is what should that magical number be. This requires some study, and market research. Hence, I need some time.
Meanwhile, please continue to let me have your views and suggestions.
Please visit the MND Facebook to leave a comment.
National Development Minister Khaw Boon Wan
Allow singles to buy studio apts with 99 years lease where they must be 35 years & above, if you do, there is no need to restrict shoebox apts in OCR because there is a real demand where demand outstrip supply, I do not need to look at statistics I can easily predict the outcome.
Source of Info;
Population growth segmented into age group
Anticipated demand from those in the marriageable age
Anticipated demand from Singles and Divorcees
Anticipated demand from foreigners
Present supply for 2013 for private
New HDB BTO flats supply
Monthly HDB Resale flats supply
Place everything on a Timeline to see the overall Demand/Supply
By shifting demand from shoebox to studio apts, what is the outcome?
It will moderate the rate of increase of prices of HDB flats
*Sky rocketing prices of HDB flats is because the government is not building enough HDB flats to satisfy demand, where there is a delay to supply due to 3 years building time and the holding period of 5 years that will make the situation worse, where the average % trend is for families who purchased a flat to stay for at least 8 years before considering selling in the resale market, for private there will be an oversupply in 2013/14 which will moderate prices.
Traditionally, we have reached the peak of birthrates where there will be a slowdown in demand of housing, but the mass influx of FTs have artificially spiked demand, now the gap is even wider where HDB is not able to satisfy demand, but when baby boomers retire, it will become a pain when many will downgrade which will create a property bubble, if not managed properly in future the crash will be even worst than Japan’s.
– Contributed by Oogle