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Thread: Mah disagrees with suggestions on land sales, deferred payment scheme

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    Default Mah disagrees with suggestions on land sales, deferred payment scheme

    Published April 5, 2008

    JURONG LAKE DISTRICT

    Mah disagrees with suggestions on land sales, deferred payment scheme


    NATIONAL Development Minister Mah Bow Tan yesterday disagreed with suggestions by property tycoon Kwek Leng Beng on the need for the government to review its first-half 2008 land sales programme and rethink its decision to scrap the deferred payment scheme.

    Mr Mah said the government can be nimble on state land sales because the programme is reviewed every six months, depending on changes in the market.

    But the H1 2008 programme will not be changed midstream, he said. 'We should be careful of knee-jerk reactions. You can't adjust it just because something is happening yesterday and then we change things today. We've got to take a longer-term view.'

    Mr Mah was speaking at a media briefing after he delivered the keynote address at Urban Redevelopment Authority's Corporate Plan seminar at Grand Copthorne Waterfront Hotel.

    In an interview published by BT this week, Mr Kwek had urged the government to review its H1 2008 land sale programme, which was fixed last year when the property market was buoyant compared with today.

    On the decision announced in October last year to scrap the deferred payment scheme, Mr Mah said yesterday it was carefully considered, taken 'after a lot of thought, deliberation'.

    'The objective was two-fold,' he said. 'One, to remove excessive speculation from the market. And two, to make sure there is financial prudence - that people make decisions and don't over-commit themselves.

    'These are two very important objectives and they are still relevant today - in fact, probably more so in today's kind of market. I don't see any need for us to change our decision on that.'

    Mr Kwek had suggested the deferred payment scheme could be revived, but this time with a higher initial payment of 30 per cent instead of 20 per cent previously. He also said that if a developer wants to extend a deferred payment scheme to a buyer, perhaps the developer's bank might be in a better position to assess viability, while keeping an eye on prudence.

    Mr Kwek also made a suggestion he said could make housing more affordable for young Singaporeans, including singles. The government could build more public housing units and lease them to young first-time buyers with an option to buy the flats within 10 years at fixed prices, he said.

    Responding yesterday, Mr Mah said he disagreed with the premise that young couples cannot afford to buy an HDB flat.

    'The average amount of money they need to put up for monthly mortgage payments is well within their means, something like 20 per cent. This is quite affordable,' he said.

    'If you were to rent, they will probably be paying as much, if not more, in rental, than to buy the flat. It doesn't make sense to rent when you can buy using your CPF. You rent, you can't use your CPF.

    'When you buy, you actually buy a place you can call your own. It's an investment. When you rent, it's not yours.

    'Our home ownership policy with all the generous housing subsidies that we have given actually allows most Singaporeans, young couples, to be able to buy their own homes.

    'If you look at the numbers, you'll find that suggestion (by Mr Kwek) does not quite make sense.'

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    April 5, 2008

    National Development Minister responds to property issues


    On rental housing:

    'Our strategy is two-pronged... We are looking to increase the supply from 43,000 today, to go up to about 50,000. So that's another 7,000 - an increase of about 20 per cent.

    'We are also relooking the eligibility criteria to make sure they cater to the really needy.

    'As an article mentioned today, a lot of people in the queue really shouldn't be in the queue. They already enjoyed a housing subsidy...and cashed out, and are now coming out to join the queue. So while they are eligible today, strictly speaking, there are other people much more in need of a rental flat.

    'There are other alternatives in place - whether it's a studio apartment, smaller flat, or the lease buyback scheme that we will roll out next month. All these are ways to monetise their flats.

    'Joining the rental flat queue is not the way and I think we have to relook our criteria.'


    On withdrawing the deferred-payment scheme:

    'It was a very carefully considered decision...The objective was twofold: remove excessive speculation from the market and make sure there is financial prudence so that people...don't over-commit.

    'These are still relevant today. We don't see a need to change the decision.'

    On City Developments chief Kwek Leng Beng's suggestion that the Government remain 'nimble' in a changing property market and review the land sales programme:

    'It's a point of view a developer will take, but there are many players in the property market; they all have their own views... They represent different, conflicting interests.

    'We can be nimble, but we have to bear in mind that we have to take a longer-term view about things...We should be careful about knee-jerk reactions.

    'We can't adjust because something happens yesterday and we change things today.'


    On increasing Singapore's population:

    'We don't know what will happen, what the numbers will be in 10 to 20 years.

    'But if we do need to increase our population to 6.5 million in the future...it is comforting to note that our physical resources, especially land, are able to support this.'

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    The knee jerk measure to increase DC after a few months of boom, after years of decline, is in fact inflicting damage to the market. There is no need to go to the extent of accusing one of serving self-interest when the other is collecting vast amount of revenue. Oh yes, the DC can be used to subsidise .......any suggestions ?

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    Dearer Home Loans For Halifax Customers
    Updated:15:39, Friday April 04, 2008

    In a further sign of the global economic slowdown, Britain's biggest mortgage lender - the Halifax - has announced plans to charge more for home loans.
    Under the changes customers with deposits of at least 25% will typically pay 0.1% less.

    But customers with smaller deposits will be hit with higher rates of interest.

    Someone borrowing between 90% and 95% of their home's value will pay up to 0.35% more than now.

    Those borrowing between 10% and 24.9% will pay around 1.4% more.

    Halifax says it will no longer advance mortgages of up to 97% of a property's value.

    The new tiers will apply to the group's entire mortgage range, with its current 136 deals being replaced with 201 new ones.

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    It is also launching a new range of loans specifically aimed at first-time buyers, including a five-year fixed-rate deal of 5.69%.

    Halifax said it had introduced the changes in response to market conditions and to reward people for being prudent.

    The changes will also apply to Bank of Scotland and Intelligent Finance.

    They come at the end of a week that has seen the number of different mortgage products available fall by 13%.

    Lenders including the Co-operative Bank have withdrawn deals that were attracting too much business, while others have left the market altogether.

    They blame the global credit squeeze which has made borrowing a lot more difficult.

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    I think KLB suggestion was very positive. Too bad if MBT missed the point and didn't respond accordingly.

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    Quote Originally Posted by Unregistered
    I think KLB suggestion was very positive. Too bad if MBT missed the point and didn't respond accordingly.
    Ask KLB to be minister of development la.

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    Quote Originally Posted by Unregistered
    Ask KLB to be minister of development la.

    Bet KLB would love to be the Min of Dev, but will MBT move aside?

    And it took Shanmugam 20 years to be come the Min of Law with such huge sacrifice. Surely Sham earns several times more as a legal titan than a Min of Law, but why would he give up the money?

    Don't tell me it is for the love of the country! It is for the power, the ability to change the law to suit your personal taste and get people like KLB banging the table. If you got the chance to see how your rivals bang the table against the policy your introduced and he could do nothing, bet you would be willing to give up millions or even billions to get the pleasure: it is something money cannot by -- peak of Maslow's hierarchy!

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    Quote Originally Posted by Unregistered
    Bet KLB would love to be the Min of Dev, but will MBT move aside?

    And it took Shanmugam 20 years to be come the Min of Law with such huge sacrifice. Surely Sham earns several times more as a legal titan than a Min of Law, but why would he give up the money?

    Don't tell me it is for the love of the country! It is for the power, the ability to change the law to suit your personal taste and get people like KLB banging the table. If you got the chance to see how your rivals bang the table against the policy your introduced and he could do nothing, bet you would be willing to give up millions or even billions to get the pleasure: it is something money cannot by -- peak of Maslow's hierarchy!
    Shan would earn more as minister. There is only limited amount of time to turn it into money as a fee earner and many partners in the large firm to share. KLB is more than qualified to run National Development but can any minister run City D. If lessons have not been learnt from the 1996 sudden measures, foreign investors will stay clear from Singaore. Measures were then announced despite assurances from ministers that there would be no interference in a laissez faire system, the last assurance from MND 2 weeks before the measures. This can still be condoned if lesson learnt and not be repeated.

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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    Oh any comments on this observation from the expats forum? Seems a knowledgeable chap. Thanks buddy for educating us. I will delay my buying.


    Quote Originally Posted by Unregistered
    I Re: Apartment sales slowing?
    Reply #389 on: 18 March 2008, 23:13:57 PM Quote

    --------------------------------------------------------------------------------
    Quote from: Kubes.SG on 18 March 2008, 23:04:49 PM

    The reason I am looking for some rational data-based economic basis for why values will boom again soon in Singapore is because I get nothing but the following soft baseless reasons, that don't link to any meaningful data:

    IRs are coming. Rich people will discover Singapore
    Singapore Flyer/Eye
    F1
    Youth Olympics
    Singapore Hub for everything
    Inflation is high and increasing in Singapore
    SGD is rising against USD
    India and China booming ecomony
    Singapore has limited land
    Population will increase to 6.5mln
    Financial/Media/Health Hub

    My points are the following:

    Singapore prime property is grossly overvalued, by historical and global standards - (don't look at the 1996 peak as the benchmark, look at the average of the last 20 years)

    Singapore's property cycle is 1-2 years of boom, followed by 1-2 years of decline then 2-5 years of stagnation

    About 30,000 new prime properties are booked to be completed by 2010, exceeding demand

    Possibly 50% of those were purchased by investors/speculators, many though DPS

    DPS entirely skewed the market by allowing speculators/developers/realtors to rapidly pump-up prices with very small financial commitment (2%-20%)

    Many of the speculators never planned to own the apartments they bought, but to flip them quickly

    With negagitve equity and being highly leverage speculators will be under massive stress. Some will walk, some will sell. Further reducing market prices and sentiment.

    Singapore's leadership are publicly bearish on the prime property market declaring prices will decline

    Sales of prime properties have collapsed over the in Jan and Feb to the lowest levels in 5 years (BT and ST this week)

    Market sentiment is at panic levels. External negative economic pressures and credit crunch is underway now in all developed economies - strong and weak. These will impact Singapore too.

    Asia has not "de-coupled" its economies from the US or WE. Singapore's exports indirectly still go mainly to the US. Consumption is till very low in Chinda. With recession in the US the reduced demand will still hit Singapre. Chinda owe Singapore nothing.

    Singapore's 2007Q4 GDP shrank 4.8% I fully expect that the SG.gov is currently pumping the local economy hard to avoid a technical recession.

    Singapore's productivity rates in 2007 declined by 0.9% - the greatest decline on record

    Latest population target is 5.5mln by 2040, or about 10,000 HH per year.

    Given current mix that means about 2,000 prime properties required per year

    Jobs growth is good, but it is largely at the lowest levels. In coming workers will not be able to live in prime property. Many incoming professionals will not be able to afford prime property rentals without correction

    Adam Smith's invisible hand of capitalism will play an influencing role in equalizing the balance




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    Default Re: Mah disagrees with suggestions on land sales, deferred payment scheme

    You will bleed listening to expat. Whoever can compile the data to show an on coming boom or decline will be a billionaire for sure. If he was smart and vested 2 years back, he would be millionaire many times over by now. Sounds like one who missed the boat.

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