Govt keeping close eye on ECs

[specuvestor]

It lives up to the government's REPUTATION of a fire fighter mentality...

What is the point of WARNING with words? Developers there to serve public interest? Time has shown again, if rules are set without enforcement, it will not work. A hard ruling, maximum size of unit, say 1500 sq ft, 4 bedrooms, will suffice. Implicitly the amount will be much more affordable.

When it comes to tax revenues, they are super efficient, world class. The rest from flood to train breakdown to industrial land to EC restrictions, it is all fire fighter approach... A world class team indeed... :-(

It was not too long ago when the complain was that Singapore is over-regulated. Personally I would prefer gahmen not to over-regulate. Set the guidelines and if things do not work, fine-tune.

Nothing wrong with being fire fighters, it is a noble profession. There will always be fire to fight. There are governments that fiddle while the country burns, so I am thankful that our gahmen is still fighting fire.

Agree. We should be objective and whenever I look at the housing policies of other countries, I am thankful our govt is not that brainless. For sure the policy is not perfect and need tweaking, and I'm not pro-govt, but pro- pragmatic and pro-reasonableness.

My suggestion for tweaking would be 1) to reintroduce the HDB resale levy for EC which it is exempted 2) remove the HDB grant 3) abolish EC resellable to foreigners after 10 years. Basically make it back to what HDB should be doing: provide affordable housing for Singaporeans. EC should just be a higher end above 5 room flat market segment for middle class pte-property-wannabe citizens. Take away the unique incentives of EC and it will adjust back inline with HDB flats. Incentives for the well to do should not be extravagant.

[Contrarian]

A world class government paid extremely high salaries, I expect them to do proactive managemen, NOT fire fighting. Do they wait for congestion at airport or airport terminals and runways like today's roads?

If they can plan for airport and seaports to that level of detail, such EC policies regulations cannot be too hard. It's just that they do not want to do such things... not revenue focus simply.

The topics of over regulation or no regulation - this area of grey, they can always speak to the developers and the buyers to get balanced views.

> It was not too long ago when the complain was that Singapore is over-regulated. Personally I would prefer gahmen not to over-
> regulate. Set the guidelines and if things do not work, fine-tune.

Nothing wrong with being fire fighters, it is a noble profession. There will always be fire to fight. There are governments that fiddle while the country burns, so I am thankful that our gahmen is still fighting fire.

If ruling party is paid so much to do fire fighting, I rather let the others have a go. I don't think it is too difficult. Any of the investors here will know how to think and pre-empt developers creativity...

[Ray168]

EC developer was told not to sell units: URA
By Cheryl Ong December 31, 2012
PROPERTY agents involved in the launch of executive condominium (EC) Forestville were told by the project's developer over the weekend to return cheques people had given them to book units in the development.
The move came after developer Hao Yuan Investment did not get approval from the authorities to sell units in the project, which was launched on Friday.
The Urban Redevelopment Authority (URA) told The Straits Times yesterday that Hao Yuan had not been authorised to sell any of the units in the development located in Woodlands.
"The developer of Forestville was given instructions from Controller of Housing (COH) on Dec28 not to proceed with sales for the EC project," said the URA spokesman. He did not elaborate on the reasons why Hao Yuan was not given approval.
Despite COH's orders, Hao Yuan went ahead with the launch but issued a "no-sale" instruction to agents. Agents were told not to collect any cheques, and prospective buyers were told that no Option-to-Purchase would be granted, said the firm.
Potential buyers could make only "expressions of interest" which Hao Yuan would honour.
But some said that agents operated normally during the launch and continued to collect cheques for bookings made.
Mr Vincent Ong, 39, had placed a cheque for a four-bedroom unit worth $910,000. "The developer's statement that no bookings of units were made contradicts the process I went through on Friday," he said.
On Friday, people had placed an interest in about 150 units in Forestville.
The latest incident comes in the wake of controversy over the high prices of EC units.
On Saturday, a 4,349 sq ft penthouse at CityLife@Tampines was sold for $2.05 million, a record high for an EC unit.
Forestville's 653 units are priced at an average of $710 per sq ft. Its biggest penthouse, with a floor area of 2,756 sq ft, has a price tag of $1.79 million.
It is unusual for developers to proceed with launches without approval to sell, said analysts.
Part of the reason is that developers want to build on the momentum and rising interest in ECs, said Chesterton Suntec International's research head, Mr Colin Tan.
There were about 6,500 EC units in the pipeline as at Sept30 with an additional 3,100 that could potentially go onstream in the first half of next year.
Said Mr Tan: "As a developer, you're not sure if market sentiment will last or not, so you will want to get some kind of commitment before interest is lost."
ocheryl@sph.com.sg
Subsided

[Musicwhiz]

Hi Ray168,

I have created a separate thread for that ST article which you posted. Kindly do a quick check before you post, thanks.

[specuvestor]

A world class government paid extremely high salaries, I expect them to do proactive managemen, NOT fire fighting. Do they wait for congestion at airport or airport terminals and runways like today's roads?

If they can plan for airport and seaports to that level of detail, such EC policies regulations cannot be too hard. It's just that they do not want to do such things... not revenue focus simply.

The topics of over regulation or no regulation - this area of grey, they can always speak to the developers and the buyers to get balanced views.

> It was not too long ago when the complain was that Singapore is over-regulated. Personally I would prefer gahmen not to over-
> regulate. Set the guidelines and if things do not work, fine-tune.

Nothing wrong with being fire fighters, it is a noble profession. There will always be fire to fight. There are governments that fiddle while the country burns, so I am thankful that our gahmen is still fighting fire.

If ruling party is paid so much to do fire fighting, I rather let the others have a go. I don't think it is too difficult. Any of the investors here will know how to think and pre-empt developers creativity...

I humbly disagree. Governments are not prophetic. They can only cater to the knowns, not the unknowns. Look at the various side effects of the CDO crisis. Is the US government stupid? Would you have foreseen it? There are unintended consequences especially when dynamics are chaos theory driven. We can only look at the big impact and tweak it as we go along. And I am very sure Khaw is going to tweak the EC because it is way out of line from the principles of HDB.

I used to think that paying ministers high salary is wrong. I now see that the PRINCIPLE is actually pragmatically right but the execution sucks. I would have less an issue if they use the mode of the mean, rather than the mean of the mode of the professions.

Like Munger always say... look at the incentive system. This incentive system is driving Singapore to be a rich man's playground. I don't think this is that surprising. Conversely if the minister's pay is pegged to say bottom 20th quartile of the population, then things will change.

EDIT: I mean MULTIPLE of 20th quartile.

[Contrarian]

US CDOs - there was ample warning by Buffet and other fund managers. Greenspan was stubborn enough to ignore it, and he leaves the market to handle it. This is the mentality of the policy makers.

> I now see that the PRINCIPLE is actually pragmatically right but the execution sucks.

If they stick to managing at the principle level, and leave execution to run by itself, then it is of course a disaster. And this is what caused the popularity to drop.

You see the first generation ministers and MPs, they focus on execution...

Our ministers had repeated feedback on housing shortages, road network building up. They chose to start tweaking it 1 week before May 2011 elections... It's plain complacency...

[specuvestor]

So was AFC, Y2K, dot com, US property bust, etc. It is very complex because policy makers have to appeal to electorates and same time implement gradual adjustments. For eg if tomorrow Khaw say no one can own more than 1 property, do you think the people will appreciate the asset deflation? And indeed, even today there are still people, especially Austrian schools, who complain that US govt shouldn't be involved in the crisis. I'm pretty sure if US didn't intervene, we would all be Greece, regardless whose fault was it in the first place.

I think BOTH principles and execution are important. Without principles, you could be very efficient in executing the wrong things, or even interpreting very complicated rules without understanding the underlying principles.

[hyom]

Nothing wrong with being fire fighters, it is a noble profession. There will always be fire to fight. There are governments that fiddle while the country burns, so I am thankful that our gahmen is still fighting fire.

After the fire has been doused by the fire-fighters, we should start asking questions like ... what is the root cause of the fire? As specuvestor has suggested, the free market is efficient but not effective, particularly on tasks with social objectives in which fairness is paramount. On hindsight, the government kept their hands off jobs that should be rightfully theirs and left too much to the free market. Why leave EC development freely to private developers when they got subsidies from taxpayers? Why privatize SMRT when it is a monopoly for a vital social service? Is it right for billions of dollars of profits to be spent on dividends for thousands of shareholders instead of maintenance of our transport infrastructure that will be used by millions of commuters? When social services are monopolized by private companies, customers like us will still have to go back to the same private monopoly regardless of how badly screwed we are. Which was better? The SMRT before it was privatized or the one after? Not trying to sidetrack this thread to SMRT woes but using SMRT as an example of bad privatisation, like ECs.

[Contrarian]

> For eg if tomorrow Khaw say no one can own more than 1 property, do you think the people will appreciate the asset deflation?

Khaw will never do this, because their objective is to entrench people in singapore. sell more land, get them off HDB phones to condos, and less worry about town council problems.

Khaw did say the bike purchase was JUSTIFIED. And he did not acknowledge the bikes of $2000 per bike was expensive, I take it that he says it is value for money.

Is this very difficult to judge and implement?

[hyom]

I humbly disagree. Governments are not prophetic. They can only cater to the knowns, not the unknowns. Look at the various side effects of the CDO crisis. Is the US government stupid? Would you have foreseen it?

While I do not expect our leaders to have near perfect foresight, the least I expect of our leaders is the courage to admit their own mistakes on hindsight.

The government post 2011GE deserves some credit. At least, those who kept insisting that HDBs are affordable till their last days in office are no longer around.