MPs offer ideas to improve CPF

(04-06-2014, 12:03 AM)specuvestor Wrote: A. Negative real rates is not a uniquely singapore phenomenon. Hopefully when interest rates normalise, whenever that might be, starting with the tapering of QE, the distortion in price of money can be resolved

B. it started because some segment of society was clamouring for a choice to get low interest pte loans for HDB flats, just as now people clamouring for more investment returns for CPF. Hence rules had to be changed for banks to have first lien on proceeds. Big mistake. Prior to this I have never heard HDB flat being auctioned. To be honest sometimes people really dont know what they are asking for

C. Negative real interest rates are always positive assets.

D. Agree people trying to extract out the CPF locked by using CPF to buy house and rent it out to get cash flow

The common solution is actually what I've been saying: to back peddle and reduce CPF used in property deposits and monthly mortgage payments. However the scheme is too entrenched and likely way forward is implement in phases for new acquires. You can thank ESM Goh for this property centric ideology

Quote:For B :-

It's natural for people to want to borrow from cheaper source (Banks) to service their debt - HDB mortgage loan of 20 to 25 years.
They can't or don't want to think too far like in case they got retrench, what's going to happen next.
i think i will do the same if i am in the same situation.

Quote:You can thank ESM Goh for this property centric ideology

Everyone should own rather than rent a HDB is actually LAU LEE's thinking.
He thinks Singaporeans should have their money tie down in's HDB.
So that Singaporeans will fight instead of just run away if there is a war. i think he is right.
Where you nest is where is your home.
You just can't run away.
Therefore try renting a flat from our G, you can't.
Only under very distressing financial circumstances you may be able to do so.

Indeed HDB has become a very "POWERFUL TOOL" for our G.
My mother who had gone over the other side(at age 90+)had told us so when she was around 50 or 60.
But a "POWER TOOL" if misuse can become a "WEAPON OF DESTRUCTION", instead.
Which the G realise now and trying to control the proper use of this "POWER TOOL"
Anyway our G is quite good at treating Singaporeans like a kite. When to ulo and when to tarik.
But even G can not control the WIND after sometimes.
Without the WIND, behind our G, ulo and tarik also no use.
The kite just won't take off.
The WIND OF CHANGE may comes sooner then our G think?
GE 2015/16 will show us indeed how much has the WIND changed.
How much???

In terms of financial planning , the HDB concessionary rate for 20 - 25 years is a risk that is easier to manage than a floating rate for 20 - 25 years.

Also, in terms of situations like the one described. It has been proven that it is easier to work with HDB than banks to manage the situation.

There are many more reasons, but it just does not make sense if you want to take loan for 20 - 35 years than a bank loan is better than the HDB Loan.

[quote='Temperament' pid='85062' dateline='1401843442']

Quote:For B :-

It's natural for people to want to borrow from cheaper source (Banks) to service their debt - HDB mortgage loan of 20 to 25 years.
They can't or don't want to think too far like in case they got retrench, what's going to happen next.
i think i will do the same if i am in the same situation.

(04-06-2014, 10:38 AM)flinger Wrote: In terms of financial planning , the HDB concessionary rate for 20 - 25 years is a risk that is easier to manage than a floating rate for 20 - 25 years.

Also, in terms of situations like the one described. It has been proven that it is easier to work with HDB than banks to manage the situation.

There are many more reasons, but it just does not make sense if you want to take loan for 20 - 35 years than a bank loan is better than the HDB Loan.

[quote='Temperament' pid='85062' dateline='1401843442']

Quote:For B :-

It's natural for people to want to borrow from cheaper source (Banks) to service their debt - HDB mortgage loan of 20 to 25 years.
They can't or don't want to think too far like in case they got retrench, what's going to happen next.
i think i will do the same if i am in the same situation.

With the current low rate, which may continue for a long time despite everyone warning of interest rate increase, it makes good business sense to borrow more. For me, the rental income from renting out hdb is giving v good yield of more than 8%. Although there is slight softening of rental rate, i think the rental market esp for hdb is still very good. There is no slow down in foreigners looking for units to rent from my observation. However not all can capitalising on this, many are staying in their units.

(04-06-2014, 08:57 AM)Temperament Wrote:

(04-06-2014, 12:03 AM)specuvestor Wrote: You can thank ESM Goh for this property centric ideology

Everyone should own rather than rent a HDB is actually LAU LEE's thinking.
He thinks Singaporeans should have their money tie down in's HDB.
So that Singaporeans will fight instead of just run away if there is a war. i think he is right.
Where you nest is where is your home.
You just can't run away.
Therefore try renting a flat from our G, you can't.
Only under very distressing financial circumstances you may be able to do so.

You misunderstood me. The idea of grounding migrants to assets locally is indeed LKY's idea. And it makes a lot of sense, even today when we talk about foreigners and S-chips.

What I am saying is ESM Goh's idea that these assets are wealth generating assets ie his asset enhancement programs, from HDB flat upgrades to sale of shophouses.

(04-06-2014, 10:38 AM)flinger Wrote: In terms of financial planning , the HDB concessionary rate for 20 - 25 years is a risk that is easier to manage than a floating rate for 20 - 25 years.

Also, in terms of situations like the one described. It has been proven that it is easier to work with HDB than banks to manage the situation.

There are many more reasons, but it just does not make sense if you want to take loan for 20 - 35 years than a bank loan is better than the HDB Loan.

(04-06-2014, 08:57 AM)Temperament Wrote: For B :-
It's natural for people to want to borrow from cheaper source (Banks) to service their debt - HDB mortgage loan of 20 to 25 years.
They can't or don't want to think too far like in case they got retrench, what's going to happen next.
i think i will do the same if i am in the same situation.

Agree with Flinger. Issue is people either don't think long term or big picture. Like I said it is not so dissimilar to this discussion in this thread on whether CPF returns should be made higher or enable more funds to be invested. If opposition is really against CPF I would like to hear their ALTERNATIVE plan for retirement planning on a national level, rather than just criticise with no solution. I doubt WP would be against CPF in principle.

Singaporeans are putting too much money into residential property.
When it reaches a feverish level, it may come down hard and fast(note the word may)
, in such a scenario, one may experience negative equity.(house being the biggest asset)
Negative equity/or underwater mortgages is the number 1 killer of the local economy.
which is why TDSR should always be in place. I am all for strict lending rules.
(as much I am for strict underwriting standards for the insurance industry)

And a gradual appreciation of property over a longer period of time, say 20-30years is essential
for cpf to work meaningfully.

(04-06-2014, 12:24 PM)specuvestor Wrote:

(04-06-2014, 08:57 AM)Temperament Wrote:

(04-06-2014, 12:03 AM)specuvestor Wrote: You can thank ESM Goh for this property centric ideology

Everyone should own rather than rent a HDB is actually LAU LEE's thinking.
He thinks Singaporeans should have their money tie down in's HDB.
So that Singaporeans will fight instead of just run away if there is a war. i think he is right.
Where you nest is where is your home.
You just can't run away.
Therefore try renting a flat from our G, you can't.
Only under very distressing financial circumstances you may be able to do so.

You misunderstood me. The idea of grounding migrants to assets locally is indeed LKY's idea. And it makes a lot of sense, even today when we talk about foreigners and S-chips.

What I am saying is ESM Goh's idea that these assets are wealth generating assets ie his asset enhancement programs, from HDB flat upgrades to sale of shophouses.

(04-06-2014, 10:38 AM)flinger Wrote: In terms of financial planning , the HDB concessionary rate for 20 - 25 years is a risk that is easier to manage than a floating rate for 20 - 25 years.

Also, in terms of situations like the one described. It has been proven that it is easier to work with HDB than banks to manage the situation.

There are many more reasons, but it just does not make sense if you want to take loan for 20 - 35 years than a bank loan is better than the HDB Loan.

(04-06-2014, 08:57 AM)Temperament Wrote: For B :-
It's natural for people to want to borrow from cheaper source (Banks) to service their debt - HDB mortgage loan of 20 to 25 years.
They can't or don't want to think too far like in case they got retrench, what's going to happen next.
i think i will do the same if i am in the same situation.

Agree with Flinger. Issue is people either don't think long term or big picture. Like I said it is not so dissimilar to this discussion in this thread on whether CPF returns should be made higher or enable more funds to be invested. If opposition is really against CPF I would like to hear their ALTERNATIVE plan for retirement planning on a national level, rather than just criticise with no solution. I doubt WP would be against CPF in principle.

Ha! Ha!
YES!
i think Singaporeans are getting tired of WP as a co-driver only and nothing else.
i think any Party can be one easily and enjoy the same "benefits" as the Papies.
Any takers?
i am sure many waiting in the wings.

Regarding HDB housing policy (assets enhancing) you are right LKY started and Goh Say Tax "Enhanced" (aka make it worse not better) it.
But have you not also think it can be a "POWERFUL TOOL" to control Singaporeans?
25 to 35 years slaving away day in and day out.
For what?
For whom?
Who really benefits the most?
You or the G?
And the process repeat for your next, next generations?
i don't think all Singaporeans are so daft like what LKY thinks.

WP biding their time, they have a small victory you want them to squander this gain and go cheong like going casino? You see what happen to CSJ, cheong cheong cheong kanna sue defamation left right center

..no no no no ... please don't fall for that trap slowly build your time will come

-tune out- the noise all the devils out there that are telling you to cheong.

Well after 5 years as co-driver at least may be can tell Singaporeans more about the car if not about the main driver. Like how you are going to improve the servicing of the car? Never mind about what the main driver may have it's own servicing car schedule. What's yours(WP), we like to hear? Can not be we still want to be co-driver only. If that is the case, many other parties are waiting in the wing. If that is the case, please make way for other parties. May be other party can be a better co-driver. It is really not a too difficult job in parliament for any other minority party to do the same.

http://www.businesstimes.com.sg/premium/...s-20140606

PUBLISHED JUNE 06, 2014
Hunt for higher CPF yields entails trade-offs, risks

There are complex issues to be considered, say specialists
BYTEH SHI NING
tshining@sph.com.sg @TehShiNingBT

Raising the returns on the Central Provident Fund (CPF) may seem the most desirable and direct way to secure a decent retirement for the country's rapidly ageing population. But doing so is far from straightforward - PHOTO: SPH
[SINGAPORE] Raising the returns on the Central Provident Fund (CPF) may seem the most desirable and direct way to secure a decent retirement for the country's rapidly ageing population. But doing so is far from straightforward.
Prime Minister Lee Hsien Loong said last week that results of a review of the CPF system will be shared in August, during a parliamentary debate which saw at least eight Members of Parliament rise to urge changes to the CPF. Online, debates over the CPF also persist.
Even after setting aside tricky issues such as separating home ownership from the CPF - which would hit the property market, hiking employers' contribution rates further - which would add to high business costs, or forcing Singaporeans to save more, the demands for better CPF returns still require a sober assessment of risk-return trade-offs, pensions researchers and economists said.
CPF savings are currently invested in risk-free Special Singapore Government Securities (SSGS) that are not traded and pay a coupon rate equal to the CPF interest rates, which are pegged to market rates of risk-free assets. As interest rates have remained low, the CPF interest rates sit at the legislated minimum of 2.5 per cent on Ordinary Account (OA) savings and 4 per cent on Special Account (SA) savings.

http://www.businesstimes.com.sg/premium/...s-20140606

PUBLISHED JUNE 06, 2014
COMMENTARY
CPF debate must reflect policy realities

It is necessary to manage a web of policy goals and trade-offs
BYWONG WEI KONGNEWS EDITOR
weikong@sph.com.sg @WongWeiKongBT

It's not too difficult, looking at how the Central Provident Fund (CPF) system has evolved over the decades, to conclude that some of the central issues it faces today resulted from past policy-making. That may even be the correct conclusion, too. - PHOTO: SPH
IT'S not too difficult, looking at how the Central Provident Fund (CPF) system has evolved over the decades, to conclude that some of the central issues it faces today resulted from past policy-making. That may even be the correct conclusion, too.
What is important, however, is to place those policies in context, and to see them for what they are - responses to the policy questions of their time.
Such perspective is important, if the current debate on the CPF is to be one that is cognisant of the complexity of the present issues.
The CPF is deeply entrenched in the socio-economic fabric of Singapore. That place in the Singapore system means it is both an agent of change, as well as being subject to change.