1 00:00:00,000 --> 00:00:02,250 Speaker 1: This is a C. N. A. Podcast. 2 00:00:04,870 --> 00:00:07,910 Speaker 1: It was close to midnight on 29 september when the 3 00:00:07,910 --> 00:00:11,680 Speaker 1: government announced another round of cooling measures aimed at reining 4 00:00:11,680 --> 00:00:16,060 Speaker 1: in exuberant property prices, especially in the HDB resale market 5 00:00:16,170 --> 00:00:20,220 Speaker 1: in the first nine months of this year, 277 flats 6 00:00:20,220 --> 00:00:24,000 Speaker 1: have been sold for over a million dollars each, surpassing 7 00:00:24,015 --> 00:00:27,155 Speaker 1: The record number of 259 such flats sold for the 8 00:00:27,155 --> 00:00:31,795 Speaker 1: entire year of 2021. Now, these latest measures include higher 9 00:00:31,805 --> 00:00:35,665 Speaker 1: interest rate flaws, smaller HDB loan limits and in a 10 00:00:35,665 --> 00:00:39,324 Speaker 1: surprising move, a 15 month waiting period for private property 11 00:00:39,325 --> 00:00:42,934 Speaker 1: owners downgrading to non subsidized HDB flats. 12 00:00:43,479 --> 00:00:45,660 Speaker 1: In today's episode of heart of the matter, we're gonna 13 00:00:45,659 --> 00:00:48,970 Speaker 1: dive right into the heart of the red hot property 14 00:00:48,970 --> 00:00:52,530 Speaker 1: market here in Singapore. There have already been 12 rounds 15 00:00:52,530 --> 00:00:57,180 Speaker 1: of cooling measures since 2010. Yet property prices have continued 16 00:00:57,190 --> 00:01:01,110 Speaker 1: to spiral upwards. So what is going on here? And 17 00:01:01,110 --> 00:01:04,070 Speaker 1: will this latest round of measures do anything to dent 18 00:01:04,069 --> 00:01:08,290 Speaker 1: demand or is something far more structural at play 19 00:01:09,600 --> 00:01:13,589 Speaker 1: joining me today are sociologist what he is Professor of 20 00:01:13,590 --> 00:01:17,590 Speaker 1: social sciences, urban studies at Yale and US College. Hi 21 00:01:17,590 --> 00:01:21,090 Speaker 1: everybody walter to Sarah, Associate professor of economics at the 22 00:01:21,090 --> 00:01:23,340 Speaker 1: Singapore University of Social Sciences 23 00:01:23,530 --> 00:01:24,080 Speaker 2: everyone. 24 00:01:24,090 --> 00:01:28,080 Speaker 1: And property agent Dont also known as mama due to 25 00:01:28,080 --> 00:01:29,870 Speaker 1: her instagram and Tiktok followers. 26 00:01:29,880 --> 00:01:33,240 Speaker 1: Thank you steven. So welcome everyone. I'm going to start 27 00:01:33,240 --> 00:01:35,950 Speaker 1: with you when you first heard the news close to midnight. 28 00:01:35,959 --> 00:01:38,510 Speaker 1: I'm sure you were bombarded with calls but you actually 29 00:01:38,510 --> 00:01:41,380 Speaker 1: said online that you were kind of expecting this. But 30 00:01:41,380 --> 00:01:44,279 Speaker 1: did it still catch you by surprise? Yes, we did 31 00:01:44,290 --> 00:01:46,890 Speaker 1: expect a couple of the measures that were introduced. That 32 00:01:46,890 --> 00:01:49,520 Speaker 1: was something that was within our expectations. That we're going 33 00:01:49,520 --> 00:01:50,160 Speaker 1: to happen, 34 00:01:50,360 --> 00:01:53,510 Speaker 1: Particularly with the lowering of the loan to value as 35 00:01:53,510 --> 00:01:55,660 Speaker 1: well as the increase in terms of the stress tests 36 00:01:55,670 --> 00:01:57,910 Speaker 1: by the banks in order to make sure that everyone 37 00:01:57,910 --> 00:02:01,040 Speaker 1: could stay affordable in today's market. One of those things 38 00:02:01,040 --> 00:02:03,800 Speaker 1: that we didn't expect was actually the 15 months waiting 39 00:02:03,800 --> 00:02:06,880 Speaker 1: out period that private property owners have to go through 40 00:02:06,890 --> 00:02:10,359 Speaker 1: before they could rejoin the HDB segment of the market again. 41 00:02:10,370 --> 00:02:12,980 Speaker 1: Did you get a lot of frantic calls from your clients? Yeah, 42 00:02:12,990 --> 00:02:16,070 Speaker 1: it was a really, really late night and early morning 43 00:02:16,070 --> 00:02:17,780 Speaker 1: for me that day. One of those days that 44 00:02:17,805 --> 00:02:21,195 Speaker 1: goes down in the history books of property, I guess. Okay, 45 00:02:21,195 --> 00:02:23,595 Speaker 1: well walter. What about you when you first heard about 46 00:02:23,595 --> 00:02:25,615 Speaker 1: these measures? What was your reaction? 47 00:02:25,625 --> 00:02:28,605 Speaker 2: It's not entirely unexpected because if you look back in 48 00:02:28,605 --> 00:02:32,155 Speaker 2: history since about maybe the middle of the pandemic, around 49 00:02:32,155 --> 00:02:35,695 Speaker 2: the end of 2020 resale prices have actually been rising 50 00:02:35,695 --> 00:02:38,355 Speaker 2: sharply for both HDB and private property. If you look 51 00:02:38,355 --> 00:02:41,955 Speaker 2: at HDB market, you're looking at quarter and quarter changes 52 00:02:41,955 --> 00:02:45,250 Speaker 2: of around 2-3% every quarter. Since around that time 53 00:02:45,419 --> 00:02:48,150 Speaker 2: We had some cooling measures at the end of 2021. 54 00:02:48,160 --> 00:02:50,230 Speaker 2: They might have slowed down the rate of increase a bit. 55 00:02:50,230 --> 00:02:53,389 Speaker 2: But clearly it didn't stop it. The broader concern here 56 00:02:53,389 --> 00:02:57,030 Speaker 2: is you are going to have property values that outpace 57 00:02:57,040 --> 00:03:00,200 Speaker 2: wage increases that outpace affordability before long, you know, if 58 00:03:00,200 --> 00:03:02,070 Speaker 2: you don't do anything about it, that that's what I 59 00:03:02,070 --> 00:03:02,950 Speaker 2: think is going on here. 60 00:03:02,950 --> 00:03:04,690 Speaker 1: I think that you've hit the nail on the head. 61 00:03:04,690 --> 00:03:06,260 Speaker 1: That was a bit right. How do you keep the 62 00:03:06,260 --> 00:03:08,730 Speaker 1: market going when no one can afford to buy a 63 00:03:08,730 --> 00:03:09,620 Speaker 1: home later on? 64 00:03:09,790 --> 00:03:12,709 Speaker 1: Big one. What about you? I think the measures were 65 00:03:12,710 --> 00:03:16,160 Speaker 1: rather conventional. The 15 months is a bit of a surprise, 66 00:03:16,160 --> 00:03:19,300 Speaker 1: but I don't believe it's going to work. Okay, why not? 67 00:03:19,310 --> 00:03:21,750 Speaker 1: Because if you look at each time it's sort of 68 00:03:21,750 --> 00:03:23,910 Speaker 1: cool down a little bit, but when it comes back 69 00:03:23,910 --> 00:03:26,510 Speaker 1: up again, it hits a higher peak than the peak 70 00:03:26,510 --> 00:03:31,090 Speaker 1: before the market has got the better of the HDB itself. Right. 71 00:03:31,100 --> 00:03:32,700 Speaker 1: Do you guys agree? Do you think it's not going 72 00:03:32,700 --> 00:03:33,760 Speaker 1: to work, man? 73 00:03:34,380 --> 00:03:36,690 Speaker 1: Well, in certain segments, I think we're probably going to 74 00:03:36,690 --> 00:03:39,630 Speaker 1: see a bit of slowdown, like probably in the segment 75 00:03:39,630 --> 00:03:41,600 Speaker 1: of the million dollar homes, that is one of the 76 00:03:41,600 --> 00:03:44,940 Speaker 1: things that really have gone out of control. Especially priced 77 00:03:44,940 --> 00:03:48,030 Speaker 1: out of people who actually need a home in today's market, 78 00:03:48,040 --> 00:03:50,590 Speaker 1: people who really need to move in due to lifestyle 79 00:03:50,590 --> 00:03:52,570 Speaker 1: changes and things like that where by they can't wait 80 00:03:52,580 --> 00:03:54,630 Speaker 1: for a bit. Then again, Honestly speaking, do they have 81 00:03:54,630 --> 00:03:57,360 Speaker 1: to buy those million dollar homes and many other homes? Right. 82 00:03:57,370 --> 00:03:59,390 Speaker 1: So I guess it's really the kind of lifestyle that 83 00:03:59,390 --> 00:04:00,800 Speaker 1: you need. I think one of those things that we 84 00:04:00,800 --> 00:04:02,910 Speaker 1: have seen change very much postcode, 85 00:04:02,932 --> 00:04:05,122 Speaker 1: it was the fact that due to the work from 86 00:04:05,122 --> 00:04:07,622 Speaker 1: home arrangements, a lot of people do see that they 87 00:04:07,632 --> 00:04:10,342 Speaker 1: need a bigger space to live in. So you do 88 00:04:10,342 --> 00:04:12,402 Speaker 1: see a lot of the property prices, particularly in the 89 00:04:12,402 --> 00:04:15,002 Speaker 1: segment of four rooms and above, which is why I 90 00:04:15,002 --> 00:04:17,882 Speaker 1: guess the 55 year old, those people have disposed of 91 00:04:17,882 --> 00:04:20,712 Speaker 1: their private property can go into properties that four rooms 92 00:04:20,712 --> 00:04:23,392 Speaker 1: and below in terms of the HDD market. So those 93 00:04:23,392 --> 00:04:25,302 Speaker 1: are the segment that the government really wants to take 94 00:04:25,302 --> 00:04:28,742 Speaker 1: control of back again after so many years of not 95 00:04:28,752 --> 00:04:31,222 Speaker 1: having control of and walter. Do you think this is 96 00:04:31,222 --> 00:04:31,462 Speaker 1: going to 97 00:04:31,484 --> 00:04:32,724 Speaker 1: these cooling measures? 98 00:04:32,734 --> 00:04:35,774 Speaker 2: These kinds of measures have got two objectives. One objective 99 00:04:35,774 --> 00:04:37,784 Speaker 2: is very practical. Of course, you want to try to 100 00:04:37,784 --> 00:04:40,303 Speaker 2: slow down the rate transactions, you know, you want to 101 00:04:40,303 --> 00:04:42,714 Speaker 2: try to reduce some of the pain points that people 102 00:04:42,714 --> 00:04:45,883 Speaker 2: are experiencing. So, I think in particular this idea that 103 00:04:45,884 --> 00:04:49,174 Speaker 2: if you're selling private property, you'll be barred temporarily from 104 00:04:49,174 --> 00:04:52,454 Speaker 2: going to buy HDB immediately. That's really trying to slow 105 00:04:52,454 --> 00:04:55,084 Speaker 2: down that segment of the market a bit. The other 106 00:04:55,084 --> 00:04:57,104 Speaker 2: objective and this is a lot harder to predict what's 107 00:04:57,104 --> 00:05:00,014 Speaker 2: going to happen, right? It's the sentiment objective, the whole, 108 00:05:00,036 --> 00:05:02,346 Speaker 2: the idea of cooling measures to try to, you might 109 00:05:02,346 --> 00:05:05,246 Speaker 2: say fire a warning shot, you know, across people's bows 110 00:05:05,246 --> 00:05:07,916 Speaker 2: to to try to signal to them that the government 111 00:05:07,916 --> 00:05:10,556 Speaker 2: has got reasons to try to cool things down because 112 00:05:10,556 --> 00:05:13,286 Speaker 2: the government believes that the situation is unsustainable. So that 113 00:05:13,286 --> 00:05:16,226 Speaker 2: sentimental thing is a lot harder to predict whether people 114 00:05:16,226 --> 00:05:17,636 Speaker 2: will get the hint and or not. You know, I 115 00:05:17,636 --> 00:05:19,196 Speaker 2: think that's a bit hard to tell. 116 00:05:19,206 --> 00:05:24,356 Speaker 1: But I think that the problem of affordability is fundamentally 117 00:05:24,366 --> 00:05:28,590 Speaker 1: to do with how the new flats are priced. 118 00:05:28,839 --> 00:05:31,289 Speaker 1: I mean, I don't think it's the resale flat only, 119 00:05:31,290 --> 00:05:33,240 Speaker 1: but I think it's the way the new flat surprised 120 00:05:33,250 --> 00:05:37,120 Speaker 1: it's the first time that the minister definitely actually said 121 00:05:37,120 --> 00:05:40,910 Speaker 1: the new flats are price relative to the resale flat 122 00:05:40,920 --> 00:05:44,650 Speaker 1: with a discount. This is the old formula that got 123 00:05:44,650 --> 00:05:46,859 Speaker 1: into 2011 disaster. 124 00:05:47,210 --> 00:05:50,710 Speaker 1: And that carbon one basically took it off at that time, 125 00:05:50,710 --> 00:05:54,610 Speaker 1: it was probably supposedly at 20% market discount when you 126 00:05:54,770 --> 00:05:58,919 Speaker 1: came into the Minister of National Development, he immediately removed 127 00:05:58,920 --> 00:06:02,370 Speaker 1: the market discount, but HD hasn't actually moved away from that. 128 00:06:02,370 --> 00:06:05,089 Speaker 1: It's just that now we don't know what is the 129 00:06:05,089 --> 00:06:06,670 Speaker 1: percentage discount. 130 00:06:06,820 --> 00:06:10,450 Speaker 1: The new flats are priced relative to the resale flat, 131 00:06:10,450 --> 00:06:13,300 Speaker 1: then the two flat prices are catching each other's tail. 132 00:06:13,310 --> 00:06:15,400 Speaker 1: That's right. It will just be a spiral that keep 133 00:06:15,400 --> 00:06:17,690 Speaker 1: spiraling upwards. So in a way you're saying it's kind 134 00:06:17,690 --> 00:06:19,740 Speaker 1: of like the same, same, but different and if we 135 00:06:19,740 --> 00:06:22,550 Speaker 1: keep going this way it's still gonna lead to higher 136 00:06:22,550 --> 00:06:26,440 Speaker 1: prices overall. Absolutely. And then the so called increased graham 137 00:06:26,450 --> 00:06:29,299 Speaker 1: may make it possible for someone to buy in. But 138 00:06:29,300 --> 00:06:32,349 Speaker 1: it doesn't bring down prices because in fact the grant 139 00:06:32,350 --> 00:06:36,010 Speaker 1: supports the price is right. You're giving a larger grant 140 00:06:36,010 --> 00:06:39,240 Speaker 1: to help you pay for what is now more expensive. 141 00:06:39,250 --> 00:06:42,630 Speaker 1: Exactly flat. It doesn't bring down the price. I don't 142 00:06:42,630 --> 00:06:46,010 Speaker 1: see how prices of the HDB flat could come down. 143 00:06:46,020 --> 00:06:48,620 Speaker 1: Besides if you come down radically 144 00:06:48,850 --> 00:06:52,089 Speaker 1: you will write down a huge chunk of the National Reserve. 145 00:06:52,100 --> 00:06:54,540 Speaker 1: You know a lot of our capital is in the 146 00:06:54,540 --> 00:06:57,450 Speaker 1: building right on that note that are being what made 147 00:06:57,460 --> 00:06:59,900 Speaker 1: one of those things that was not published. I think 148 00:06:59,900 --> 00:07:03,169 Speaker 1: in a lot of the transaction records was actually the C. O. V. 149 00:07:03,170 --> 00:07:05,910 Speaker 1: Value as well which is the cash overvaluation that people 150 00:07:05,910 --> 00:07:09,370 Speaker 1: are paying on the existing resale prices. So when these 151 00:07:09,370 --> 00:07:12,070 Speaker 1: sort of information is not captured but yet captured in 152 00:07:12,070 --> 00:07:12,910 Speaker 1: transaction price 153 00:07:12,935 --> 00:07:16,035 Speaker 1: automatically, the next owner wants to price your property higher 154 00:07:16,035 --> 00:07:18,755 Speaker 1: than the one that was previously sold. Which then result 155 00:07:18,755 --> 00:07:21,175 Speaker 1: in this endless loop of how the properties prices have 156 00:07:21,175 --> 00:07:23,815 Speaker 1: been increasing and increasing. We can't control that right because 157 00:07:23,815 --> 00:07:25,585 Speaker 1: that C. O. V. Is kind of a little bit 158 00:07:25,585 --> 00:07:28,375 Speaker 1: based on a feeling you feel your property is worth 159 00:07:28,375 --> 00:07:30,065 Speaker 1: more and you want more for it. And if someone 160 00:07:30,065 --> 00:07:32,275 Speaker 1: is willing to pay you for it then the line 161 00:07:32,275 --> 00:07:35,355 Speaker 1: here is drawn as to who actually decides the C. O. V. Value. 162 00:07:35,355 --> 00:07:36,995 Speaker 1: Who actually sets this price 163 00:07:37,020 --> 00:07:39,660 Speaker 1: for the properties especially when it comes to H. D. B. 164 00:07:39,670 --> 00:07:41,930 Speaker 1: Do we have like a benchmark? In terms of how 165 00:07:41,930 --> 00:07:44,290 Speaker 1: much in a certain area this property is supposed to 166 00:07:44,290 --> 00:07:46,630 Speaker 1: be cost Because now like one bank market is that 167 00:07:46,640 --> 00:07:48,740 Speaker 1: all the Bto price is actually based off what the 168 00:07:48,740 --> 00:07:51,980 Speaker 1: resale prices are currently in the current market when a 169 00:07:51,980 --> 00:07:55,100 Speaker 1: sector is like a district particularly like Tokyo or like 170 00:07:55,100 --> 00:07:58,910 Speaker 1: some township that has very mature pricing which is today 171 00:07:58,910 --> 00:08:01,080 Speaker 1: at an all time high. So do we then 172 00:08:01,105 --> 00:08:04,485 Speaker 1: I have actually a real discount on this Bto prices 173 00:08:04,485 --> 00:08:07,425 Speaker 1: that are actually launched especially in the last exercise. Are 174 00:08:07,425 --> 00:08:09,364 Speaker 1: we pegging it to the wrong prices. Should it not 175 00:08:09,365 --> 00:08:12,815 Speaker 1: be packed to resale prices? It should be packed to cost. 176 00:08:12,825 --> 00:08:15,255 Speaker 1: Okay so for the new Bto flats back to cost, 177 00:08:15,265 --> 00:08:18,145 Speaker 1: even if the land cost will factor into the building 178 00:08:18,155 --> 00:08:23,305 Speaker 1: because valuation always takes the latest sales figure, it never 179 00:08:23,305 --> 00:08:25,190 Speaker 1: takes the lowest sales figure. 180 00:08:25,340 --> 00:08:29,550 Speaker 1: The mechanism itself is a continuous spiral upwards walter. Do 181 00:08:29,550 --> 00:08:30,140 Speaker 1: you agree? 182 00:08:30,150 --> 00:08:32,170 Speaker 2: I want to take a step back and actually tackle 183 00:08:32,170 --> 00:08:34,459 Speaker 2: a couple of broader issues. So I think one issue 184 00:08:34,460 --> 00:08:37,780 Speaker 2: first is this whole question of affordability, million dollars to 185 00:08:37,780 --> 00:08:39,250 Speaker 2: behave and so on. Right And then I think we'll 186 00:08:39,250 --> 00:08:42,410 Speaker 2: talk a bit about this issue of pricing mechanisms first, 187 00:08:42,410 --> 00:08:44,670 Speaker 2: if we take a step back as a whole in 188 00:08:44,670 --> 00:08:47,610 Speaker 2: the market in Singapore. What you don't have a problem 189 00:08:47,610 --> 00:08:50,420 Speaker 2: with necessarily is the lack of housing or lack of 190 00:08:50,420 --> 00:08:52,750 Speaker 2: public housing. What you have a problem with 191 00:08:52,760 --> 00:08:56,400 Speaker 2: is a lack of public housing that people want in 192 00:08:56,410 --> 00:08:58,939 Speaker 2: areas that they want to live in at a price 193 00:08:58,940 --> 00:09:01,309 Speaker 2: that they can afford. That's basically what you have a 194 00:09:01,309 --> 00:09:04,349 Speaker 2: lack of right? And that lack of shows up in 195 00:09:04,350 --> 00:09:08,040 Speaker 2: the extraordinarily high HDD prices for certain refill property, because 196 00:09:08,040 --> 00:09:11,059 Speaker 2: that reflects the fact that in those hot areas, right, 197 00:09:11,059 --> 00:09:13,790 Speaker 2: whether it's Clementi or to buy or vision or whatever, right? 198 00:09:13,790 --> 00:09:16,380 Speaker 2: In those hot areas there's a small supply of it 199 00:09:16,380 --> 00:09:18,710 Speaker 2: should reflect that everybody wants to live in. And so 200 00:09:18,710 --> 00:09:20,179 Speaker 2: the prices get pushed up, but 201 00:09:20,370 --> 00:09:23,300 Speaker 2: at the same time you can have very low price 202 00:09:23,300 --> 00:09:26,860 Speaker 2: or very modestly priced, it should be flat in very 203 00:09:26,860 --> 00:09:29,090 Speaker 2: far outlying parts of Singapore that a lot of people 204 00:09:29,090 --> 00:09:30,680 Speaker 2: don't want to live in. Right? And so 205 00:09:30,890 --> 00:09:34,520 Speaker 2: that's actually the problem here. So affordability is not so 206 00:09:34,520 --> 00:09:36,470 Speaker 2: much a problem of I cannot find any housing in 207 00:09:36,470 --> 00:09:38,280 Speaker 2: Singapore anywhere. It's about, you know, where do I want 208 00:09:38,280 --> 00:09:38,840 Speaker 2: to live? So 209 00:09:38,840 --> 00:09:41,620 Speaker 1: not really supply and demand because you're saying there is supply, 210 00:09:41,630 --> 00:09:43,740 Speaker 2: it is supply and demand, but if it's a problem 211 00:09:43,740 --> 00:09:46,310 Speaker 2: of a lack of supply in the areas that people 212 00:09:46,309 --> 00:09:46,760 Speaker 2: are really, 213 00:09:46,780 --> 00:09:49,030 Speaker 1: there are enough homes for all of us in the country, 214 00:09:49,030 --> 00:09:51,290 Speaker 1: just not in the areas that we all want to 215 00:09:51,290 --> 00:09:51,890 Speaker 2: be. 216 00:09:52,370 --> 00:09:54,939 Speaker 1: But that's the same all over the world. Right? I 217 00:09:54,940 --> 00:09:57,840 Speaker 1: mean everybody wants to live in certain areas actually, I 218 00:09:57,840 --> 00:10:01,449 Speaker 1: think the million dollar flats are just a symbolic problem 219 00:10:01,450 --> 00:10:04,250 Speaker 1: is a political problem that the government would like to 220 00:10:04,250 --> 00:10:08,840 Speaker 1: see 250 flats a year in 1.1 million flats of 221 00:10:08,840 --> 00:10:11,059 Speaker 1: HDB really doesn't amount to 222 00:10:11,075 --> 00:10:17,205 Speaker 1: anything. It's just that politically it looks bad because it's 223 00:10:17,205 --> 00:10:23,145 Speaker 1: morally unacceptable when people are using subsidized flats to rake 224 00:10:23,145 --> 00:10:25,834 Speaker 1: off huge profit. Okay, I mean you bring a good 225 00:10:25,835 --> 00:10:28,965 Speaker 1: question here because for a long time HDB flats have 226 00:10:28,965 --> 00:10:33,915 Speaker 1: been seemed subsidized housing to make homes affordable. But now 227 00:10:33,915 --> 00:10:35,305 Speaker 1: it seems to be a bit of a twist. Many 228 00:10:35,304 --> 00:10:37,559 Speaker 1: people are looking to this as an investment. 229 00:10:37,750 --> 00:10:40,600 Speaker 1: The government encouraged this, you can sell it later, you 230 00:10:40,600 --> 00:10:43,350 Speaker 1: have some money for your retirement. So what's wrong with 231 00:10:43,350 --> 00:10:46,250 Speaker 1: this formula now? I think people have to start recognizing 232 00:10:46,250 --> 00:10:48,950 Speaker 1: that H. D. V. Is not for investment. Like you 233 00:10:48,950 --> 00:10:51,570 Speaker 1: have to know like how Singapore land authority, how they 234 00:10:51,570 --> 00:10:54,120 Speaker 1: price HDB is very much based on the ballot curve 235 00:10:54,130 --> 00:10:54,400 Speaker 1: and 236 00:10:54,610 --> 00:10:56,990 Speaker 1: it will go down to zero. And I think this 237 00:10:57,000 --> 00:11:01,340 Speaker 1: exercise of introducing cooling measures that are really directed at H. D. B. S. 238 00:11:01,340 --> 00:11:04,370 Speaker 1: Is basically like firing of assigned to say that look 239 00:11:04,370 --> 00:11:07,290 Speaker 1: guys this is not meant to be an investment. If 240 00:11:07,290 --> 00:11:09,270 Speaker 1: you look at the H. D. B. In a period 241 00:11:09,270 --> 00:11:12,819 Speaker 1: where it was 2014 all the way until pre covid 242 00:11:13,000 --> 00:11:16,300 Speaker 1: Our prices were kept affordable for many, many, many years 243 00:11:16,309 --> 00:11:19,189 Speaker 1: before the change in lifestyle and of course the shortage 244 00:11:19,190 --> 00:11:22,949 Speaker 1: of supply of ready homes then push this up abnormally 245 00:11:22,960 --> 00:11:25,760 Speaker 1: in the last two years. From 2022 year. Today we 246 00:11:25,760 --> 00:11:30,350 Speaker 1: have increased about 24.1%. Just based off resale HDB like P. P. I. 247 00:11:30,360 --> 00:11:33,450 Speaker 1: This is abnormal for us, it's not supposed to be happening. 248 00:11:33,460 --> 00:11:36,199 Speaker 1: But walter just said we have enough flat. There is supply, 249 00:11:36,200 --> 00:11:39,600 Speaker 1: it's just not in the popular areas, but even for B. T. O. S. 250 00:11:39,600 --> 00:11:43,840 Speaker 1: If you look at um it's oversubscribed every single round. Okay, 251 00:11:43,840 --> 00:11:46,339 Speaker 1: okay so the BTS have been delayed. We all know 252 00:11:46,340 --> 00:11:49,699 Speaker 1: that right. Not only that, it's also the demand far 253 00:11:49,700 --> 00:11:52,460 Speaker 1: exceeds the supply. The waiting time is just going to 254 00:11:52,460 --> 00:11:53,920 Speaker 1: be longer and longer. 255 00:11:54,100 --> 00:11:57,760 Speaker 1: The other problem is the HDB flat cannot not be 256 00:11:57,760 --> 00:12:01,550 Speaker 1: an asset. It has to be because it's tied to 257 00:12:01,550 --> 00:12:06,280 Speaker 1: your retirement funds. You're thinking most of your CPF into 258 00:12:06,280 --> 00:12:09,440 Speaker 1: the flat that money has to be realized to fund 259 00:12:09,440 --> 00:12:12,860 Speaker 1: your retirement years. It will not run to zero. Right? 260 00:12:12,870 --> 00:12:15,980 Speaker 1: And it's not entirely wrong to think that way. So 261 00:12:15,980 --> 00:12:18,360 Speaker 1: where did we go wrong here because it makes sense 262 00:12:18,360 --> 00:12:21,370 Speaker 1: to have a home that increases in value so that 263 00:12:21,370 --> 00:12:22,290 Speaker 1: later on you can 264 00:12:22,306 --> 00:12:25,285 Speaker 1: benefit from some of that. What is the structural problem 265 00:12:25,285 --> 00:12:25,695 Speaker 1: here 266 00:12:25,706 --> 00:12:27,986 Speaker 2: banquet actually knows a lot more about this than I do, 267 00:12:27,986 --> 00:12:29,466 Speaker 2: I think, but if you just go back to the 268 00:12:29,466 --> 00:12:33,226 Speaker 2: origins of HDB, it was always meant to be both 269 00:12:33,236 --> 00:12:35,896 Speaker 2: a roof over your head social housing, but it was 270 00:12:35,905 --> 00:12:39,216 Speaker 2: also meant to be an ownership asset. I mean maybe 271 00:12:39,216 --> 00:12:41,076 Speaker 2: it was not meant at the inception to be an 272 00:12:41,076 --> 00:12:43,896 Speaker 2: ownership of the type that you could eventually monetize itself 273 00:12:43,896 --> 00:12:46,916 Speaker 2: a retirement. But the idea of the ownership stake was 274 00:12:46,926 --> 00:12:50,256 Speaker 2: integral because of this belief that when you give people 275 00:12:50,256 --> 00:12:50,500 Speaker 2: a stay 276 00:12:50,511 --> 00:12:52,322 Speaker 2: in the country, in the community and so on, then 277 00:12:52,322 --> 00:12:55,162 Speaker 2: people put down, you know, more routes, they're better neighbors, 278 00:12:55,162 --> 00:12:57,052 Speaker 2: they've got something to fight for in case anything happened 279 00:12:57,052 --> 00:12:59,651 Speaker 2: to Singapore, all those kinds of arguments. That was why 280 00:12:59,662 --> 00:13:02,862 Speaker 2: the decision was made to sell HDB the people instead 281 00:13:02,862 --> 00:13:05,651 Speaker 2: of letting people live at low rent. The HDB which 282 00:13:05,652 --> 00:13:08,452 Speaker 2: is actually the decision made in many other countries with 283 00:13:08,452 --> 00:13:11,472 Speaker 2: large public housing programs. So we went a different direction 284 00:13:11,472 --> 00:13:14,492 Speaker 2: because we wanted to make it an ownership item. The 285 00:13:14,502 --> 00:13:16,822 Speaker 2: issue is that once you start with that objective and 286 00:13:16,822 --> 00:13:18,712 Speaker 2: you go down the road from there, 287 00:13:18,920 --> 00:13:23,030 Speaker 2: when has that value started going up when you liberalize 288 00:13:23,030 --> 00:13:25,840 Speaker 2: the refill market when people realize that they can actually 289 00:13:25,840 --> 00:13:28,160 Speaker 2: make a lot of money from happening to have the 290 00:13:28,160 --> 00:13:30,640 Speaker 2: lucky accident of owning it should be in popular areas. 291 00:13:30,650 --> 00:13:33,670 Speaker 2: That's where certain other considerations come in and then become 292 00:13:33,670 --> 00:13:36,600 Speaker 2: very difficult to unwind the whole situation and that's I 293 00:13:36,600 --> 00:13:37,880 Speaker 2: think more where we are, would 294 00:13:37,880 --> 00:13:41,260 Speaker 1: This have been okay if people were benefiting but just 295 00:13:41,260 --> 00:13:43,670 Speaker 1: not that much, you know, so you're 500 296 00:13:43,809 --> 00:13:46,940 Speaker 1: $1000 apartment eventually you sold it for 600 that's okay, 297 00:13:46,940 --> 00:13:50,809 Speaker 1: not a million dollars that would have been acceptable. Right? P. R. H. 298 00:13:50,809 --> 00:13:53,020 Speaker 1: Was one of those schemes that came up to stop 299 00:13:53,020 --> 00:13:56,490 Speaker 1: people from speculating in this kind of places where it's 300 00:13:56,490 --> 00:14:00,130 Speaker 1: widely contended in mature housing estate. That's a really good 301 00:14:00,130 --> 00:14:01,830 Speaker 1: move to tell people like look if you're going to 302 00:14:01,830 --> 00:14:03,550 Speaker 1: sell this next time, I'm going to take a portion 303 00:14:03,550 --> 00:14:05,809 Speaker 1: of the profits of that sale as well. And then 304 00:14:05,809 --> 00:14:07,790 Speaker 1: it stops people from going with the notion that I'm 305 00:14:07,790 --> 00:14:08,700 Speaker 1: going to speculate, 306 00:14:08,860 --> 00:14:11,140 Speaker 1: it comes to a point whereby we really need to 307 00:14:11,140 --> 00:14:14,480 Speaker 1: think about what's going to happen to the next generation, 308 00:14:14,480 --> 00:14:17,330 Speaker 1: will they be able to afford these homes that we 309 00:14:17,330 --> 00:14:20,940 Speaker 1: are paying for currently without the help of your parents 310 00:14:20,950 --> 00:14:23,980 Speaker 1: because your parents are probably struggling to pay off the 311 00:14:23,980 --> 00:14:26,220 Speaker 1: home and then the next generation will probably be the 312 00:14:26,220 --> 00:14:28,460 Speaker 1: one that's going to be left with this asset or 313 00:14:28,460 --> 00:14:31,730 Speaker 1: liability question mark, We don't know one way to change 314 00:14:31,730 --> 00:14:34,730 Speaker 1: this is to look at the HDB and the flat 315 00:14:34,730 --> 00:14:35,610 Speaker 1: buyer 316 00:14:36,080 --> 00:14:40,820 Speaker 1: as co owner of the flat, so when it is, 317 00:14:40,820 --> 00:14:44,460 Speaker 1: so the HV claims the portion of profit in which 318 00:14:44,460 --> 00:14:47,750 Speaker 1: it has invested but this will require the government to 319 00:14:47,750 --> 00:14:51,110 Speaker 1: be actually very transparent and matter how much the flat 320 00:14:51,110 --> 00:14:55,430 Speaker 1: cost and therefore the government's portion of the investment 321 00:14:55,860 --> 00:14:59,050 Speaker 1: because I don't think HDB flats should still be called 322 00:14:59,050 --> 00:15:02,060 Speaker 1: public housing anymore. It is a commodity in the market. 323 00:15:02,070 --> 00:15:05,250 Speaker 1: Think of it as joint ownership between the H. D. B. 324 00:15:05,260 --> 00:15:09,660 Speaker 1: And the buyer of the flat. The Prophet is proportionally 325 00:15:09,670 --> 00:15:12,670 Speaker 1: if they managed to live up to 90 years, so 326 00:15:12,670 --> 00:15:14,930 Speaker 1: be it. But if they sell it, they have to 327 00:15:14,940 --> 00:15:17,890 Speaker 1: pay back the portion that the government has invested in. 328 00:15:17,890 --> 00:15:19,810 Speaker 1: It actually does not such a bad idea and the 329 00:15:19,810 --> 00:15:21,770 Speaker 1: way I think about it, but it also means when 330 00:15:21,770 --> 00:15:23,730 Speaker 1: you buy it off the shelf, it'll be cheaper. So 331 00:15:23,730 --> 00:15:25,170 Speaker 1: a $300,000 flat 332 00:15:25,330 --> 00:15:28,520 Speaker 1: for example, I may pay 100 and 50 HDB owns 333 00:15:28,570 --> 00:15:31,010 Speaker 1: 100 and 50. So there's a 50 50 share that 334 00:15:31,010 --> 00:15:33,870 Speaker 1: should applies only to new flats, right? Because the resale 335 00:15:33,870 --> 00:15:36,700 Speaker 1: flat is already in the market which the government has 336 00:15:36,700 --> 00:15:39,370 Speaker 1: no control. But then again that sense of ownership, that 337 00:15:39,370 --> 00:15:41,730 Speaker 1: water talked about earlier, maybe you feel a little bit 338 00:15:41,730 --> 00:15:43,930 Speaker 1: less invested since it's not really 339 00:15:43,955 --> 00:15:46,955 Speaker 1: my home. You know, I don't know, then it is fine, 340 00:15:46,955 --> 00:15:49,215 Speaker 1: then you simply live in it and not keep thinking 341 00:15:49,215 --> 00:15:51,975 Speaker 1: about selling it to make profit or maybe a shorter 342 00:15:51,975 --> 00:15:54,635 Speaker 1: lease will do like how they shorten the leases on 343 00:15:54,645 --> 00:15:58,065 Speaker 1: commercial industrial properties, right? It could make sense in residential 344 00:15:58,065 --> 00:16:00,305 Speaker 1: properties to make it more affordable for people who are 345 00:16:00,315 --> 00:16:02,580 Speaker 1: only looking to stay for a certain period of time, 346 00:16:02,740 --> 00:16:04,700 Speaker 1: until to the point that you have a mass enough 347 00:16:04,700 --> 00:16:07,320 Speaker 1: wealth to move off to a bigger property or something 348 00:16:07,320 --> 00:16:10,680 Speaker 1: like that. That could make housing more affordable. But such 349 00:16:10,680 --> 00:16:13,770 Speaker 1: a request as your radical requests mentioned being what is 350 00:16:13,770 --> 00:16:17,270 Speaker 1: quite unlikely as we know it. So, so what then, 351 00:16:17,270 --> 00:16:19,790 Speaker 1: so do you think now that these cooling measures, how 352 00:16:19,790 --> 00:16:21,890 Speaker 1: are they going to have an effect? How are they 353 00:16:21,890 --> 00:16:23,900 Speaker 1: going to affect people who are now on the ground, 354 00:16:23,910 --> 00:16:26,690 Speaker 1: especially those who are looking to get a flat in 355 00:16:26,690 --> 00:16:27,570 Speaker 1: the next few years? 356 00:16:27,920 --> 00:16:30,650 Speaker 1: I think it will slow down the sails a little bit, 357 00:16:30,650 --> 00:16:33,110 Speaker 1: but I don't really think it's going to have great 358 00:16:33,110 --> 00:16:35,770 Speaker 1: effect is your prediction that prices will just come back 359 00:16:35,770 --> 00:16:38,110 Speaker 1: up again in a few years? I won't even say 360 00:16:38,110 --> 00:16:41,050 Speaker 1: a few years, wow. So this will have a real 361 00:16:41,050 --> 00:16:43,550 Speaker 1: short term effect. Yeah, I mean, I think, you know, 362 00:16:43,550 --> 00:16:46,980 Speaker 1: the minister said, it's temporary 15 months, it's a year 363 00:16:46,980 --> 00:16:50,170 Speaker 1: and a half of a rental, right? If you're selling 364 00:16:50,170 --> 00:16:53,700 Speaker 1: a private house and buying it should be flat taking 365 00:16:53,700 --> 00:16:56,869 Speaker 1: out 1.5 years of rental from your sales, 366 00:16:57,080 --> 00:17:00,380 Speaker 1: It's not a huge chunk of the money that you 367 00:17:00,380 --> 00:17:02,990 Speaker 1: are talking about you. And what do you think, what 368 00:17:02,990 --> 00:17:05,110 Speaker 1: were the main concerns that your clients had when they 369 00:17:05,109 --> 00:17:07,530 Speaker 1: first heard about these measures? There is a portion of 370 00:17:07,530 --> 00:17:10,649 Speaker 1: four room flats that were very interested to see because 371 00:17:10,650 --> 00:17:13,350 Speaker 1: that is actually the sweet spot that could avoid the 372 00:17:13,350 --> 00:17:16,210 Speaker 1: cooling measures, in which case that people over 55 could 373 00:17:16,210 --> 00:17:19,760 Speaker 1: move towards four room flats and below. And also for 374 00:17:19,760 --> 00:17:21,630 Speaker 1: the foreign flats that are currently on the market, we 375 00:17:21,630 --> 00:17:23,540 Speaker 1: have seen some sort of adjustments in price 376 00:17:23,880 --> 00:17:26,869 Speaker 1: um due to the demand for the forum flats instead 377 00:17:26,869 --> 00:17:29,199 Speaker 1: of the E. A. The jumbo flats and you know, 378 00:17:29,200 --> 00:17:31,700 Speaker 1: the mason, it's, they're currently on the market. I think 379 00:17:31,700 --> 00:17:36,030 Speaker 1: also there's some complaint about HB owners about the private 380 00:17:36,030 --> 00:17:40,780 Speaker 1: property move into private property and rent out the HDB flat. Right? 381 00:17:40,790 --> 00:17:44,129 Speaker 1: That is morally problematic. That's not supposed to be the 382 00:17:44,130 --> 00:17:47,130 Speaker 1: case too right. I mean, Exactly. And I don't know 383 00:17:47,130 --> 00:17:50,010 Speaker 1: why that is being allowed. 384 00:17:50,390 --> 00:17:54,520 Speaker 1: You know, you are allowing someone who actually capitalized on 385 00:17:54,520 --> 00:18:00,730 Speaker 1: publicly subsidized flat to become a landlord. If that were eliminated, 386 00:18:00,730 --> 00:18:04,750 Speaker 1: that might increase a little bit of supply of resale flat, 387 00:18:04,760 --> 00:18:08,470 Speaker 1: but surely that is not that large and it doesn't matter. 388 00:18:08,470 --> 00:18:11,590 Speaker 1: It's still morally a problem because, you know, you get 389 00:18:11,590 --> 00:18:15,940 Speaker 1: occasional letters to the forum on precisely that point, right. 390 00:18:16,320 --> 00:18:18,580 Speaker 1: I mean, if we think a million dollar flats are 391 00:18:18,580 --> 00:18:22,220 Speaker 1: a problem, this is even more seriously a problem on 392 00:18:22,220 --> 00:18:25,170 Speaker 1: what just said. I do agree because the demand right 393 00:18:25,170 --> 00:18:29,420 Speaker 1: now actually stems from people who actually need ready flats 394 00:18:29,430 --> 00:18:32,960 Speaker 1: by having these HDB flats that are already being rented out. 395 00:18:32,960 --> 00:18:36,270 Speaker 1: It does displace a whole chunk of people that needs 396 00:18:36,270 --> 00:18:39,380 Speaker 1: the flat to use it for owner occupation basically. 397 00:18:39,530 --> 00:18:42,350 Speaker 1: That could possibly read the problem in the short term 398 00:18:42,350 --> 00:18:45,900 Speaker 1: where there is no supply for ready flats. So what then, 399 00:18:45,900 --> 00:18:47,679 Speaker 1: how do we proceed from here? So it sounds like 400 00:18:47,680 --> 00:18:50,830 Speaker 1: these cooling measures based on what you are saying here, 401 00:18:50,830 --> 00:18:53,929 Speaker 1: but you seem a bit skeptical about just how effective 402 00:18:53,940 --> 00:18:56,930 Speaker 1: they will be or how long they will last. Is 403 00:18:56,930 --> 00:19:00,080 Speaker 1: there a way to help reset things to get things 404 00:19:00,080 --> 00:19:00,850 Speaker 1: back to, 405 00:19:01,040 --> 00:19:04,170 Speaker 1: you know, where they were before? My sense is that 406 00:19:04,170 --> 00:19:07,910 Speaker 1: I think of the current HDB system like a computer 407 00:19:07,910 --> 00:19:12,080 Speaker 1: operating system every time some problem comes up, you put 408 00:19:12,080 --> 00:19:14,540 Speaker 1: a patch on it and you keep patching, but there's 409 00:19:14,540 --> 00:19:18,010 Speaker 1: no way of changing the whole operating system, it will 410 00:19:18,010 --> 00:19:20,929 Speaker 1: collapse if you think of clothing is becoming like a 411 00:19:20,930 --> 00:19:24,570 Speaker 1: tattered shirt with a lot of patches, but you can't 412 00:19:24,570 --> 00:19:27,380 Speaker 1: give it up because it's no longer just an economic 413 00:19:27,380 --> 00:19:28,430 Speaker 1: issue because 414 00:19:28,440 --> 00:19:31,040 Speaker 1: surprising has become more and more will become more and 415 00:19:31,040 --> 00:19:35,070 Speaker 1: more political issue. We've already seen this in 2011 and 416 00:19:35,070 --> 00:19:37,460 Speaker 1: so the government has to keep patching. I don't think 417 00:19:37,460 --> 00:19:40,270 Speaker 1: there is a choice and unfortunately you can also put 418 00:19:40,270 --> 00:19:42,810 Speaker 1: in an entire new operating system because you don't own 419 00:19:42,810 --> 00:19:47,010 Speaker 1: the whole system yourself, so no longer and no longer Okay, 420 00:19:47,310 --> 00:19:50,510 Speaker 1: what do you think? I'm support of the P. L. H. Scheme? 421 00:19:50,510 --> 00:19:52,910 Speaker 1: I really think having a longer M. O. P. Period 422 00:19:52,920 --> 00:19:55,850 Speaker 1: does deter people from seeing HDB as an investment. 423 00:19:56,080 --> 00:19:59,270 Speaker 1: I do believe the profit taking portion of the P. R. 424 00:19:59,320 --> 00:20:03,119 Speaker 1: Scheme is also good in that sense whereby the government 425 00:20:03,119 --> 00:20:05,770 Speaker 1: does take a certain amount of the sale of the 426 00:20:05,770 --> 00:20:07,530 Speaker 1: property later on. That's one way 427 00:20:07,670 --> 00:20:11,070 Speaker 1: I think reducing the existing leases on the new BTS, 428 00:20:11,070 --> 00:20:14,649 Speaker 1: for example could also continue to keep prices more affordable 429 00:20:14,660 --> 00:20:17,639 Speaker 1: as we get more used to, you know, shorter leases 430 00:20:17,650 --> 00:20:20,609 Speaker 1: in today's era, but people feel a bit insecure, like 431 00:20:20,619 --> 00:20:24,020 Speaker 1: not sure we can live very well old age, I 432 00:20:24,020 --> 00:20:28,260 Speaker 1: think 99 years is too long. Yeah, okay. We always 433 00:20:28,260 --> 00:20:31,290 Speaker 1: want to upgrade right two rooms three rooms for. But 434 00:20:31,290 --> 00:20:33,230 Speaker 1: the idea of some kind of fee involved, even 435 00:20:33,240 --> 00:20:36,000 Speaker 1: like some membership fees when you transfer it, you have 436 00:20:36,000 --> 00:20:38,120 Speaker 1: to pay a transfer fee for the membership. So that 437 00:20:38,119 --> 00:20:40,889 Speaker 1: could be something that HDB could, yeah, walter. What do 438 00:20:40,890 --> 00:20:40,950 Speaker 1: you 439 00:20:40,950 --> 00:20:43,459 Speaker 2: think we've been talking is if there's nowhere for prices 440 00:20:43,460 --> 00:20:45,109 Speaker 2: to go up. But I think what I want to 441 00:20:45,109 --> 00:20:48,300 Speaker 2: caution is that I do think one of the reasons, 442 00:20:48,300 --> 00:20:50,830 Speaker 2: I think why the government put in cooling measures now 443 00:20:50,840 --> 00:20:53,070 Speaker 2: is that, you know, if you look at the overall 444 00:20:53,080 --> 00:20:57,030 Speaker 2: economic situation, interest rates going up, it doesn't look like 445 00:20:57,030 --> 00:20:58,800 Speaker 2: the global economy is going to be going to 446 00:20:58,810 --> 00:21:01,260 Speaker 2: very good time over the next couple of years. So 447 00:21:01,270 --> 00:21:03,669 Speaker 2: I do think one of the reasons for cooling is 448 00:21:03,670 --> 00:21:06,190 Speaker 2: to actually try to get the market to stabilize rather 449 00:21:06,190 --> 00:21:08,810 Speaker 2: than for the market to keep appreciating and run into 450 00:21:08,810 --> 00:21:11,270 Speaker 2: a big crash in the next year or so. And 451 00:21:11,280 --> 00:21:12,770 Speaker 2: at which point a lot more people are going to 452 00:21:12,770 --> 00:21:15,810 Speaker 2: get hurt. So in some way, the greatest danger is 453 00:21:15,810 --> 00:21:17,980 Speaker 2: that you get exactly what you want right? Everybody wants 454 00:21:17,980 --> 00:21:20,940 Speaker 2: lower prices, more affordability. But if you get what you want, 455 00:21:20,950 --> 00:21:24,000 Speaker 2: that might come together with a very bad economic situation 456 00:21:24,000 --> 00:21:24,320 Speaker 2: for sin 457 00:21:24,550 --> 00:21:26,899 Speaker 2: and indeed much of the region of the world. And 458 00:21:26,900 --> 00:21:29,160 Speaker 2: if that does happen, it will, on the one hand 459 00:21:29,160 --> 00:21:31,890 Speaker 2: be an opportunity to reset prices, but it also means 460 00:21:31,890 --> 00:21:33,330 Speaker 2: a lot of pain for a lot of people. So 461 00:21:33,340 --> 00:21:36,629 Speaker 2: how you manage those factors, I think it's quite challenging. 462 00:21:37,090 --> 00:21:40,860 Speaker 1: You will not be allowed to happen really think, but 463 00:21:40,859 --> 00:21:43,359 Speaker 1: we know if a recession kicks in, then it means 464 00:21:43,359 --> 00:21:46,060 Speaker 1: people lose their jobs, sure property prices have dropped, but 465 00:21:46,060 --> 00:21:47,910 Speaker 1: I don't have a job anymore. So it doesn't matter. 466 00:21:48,080 --> 00:21:49,940 Speaker 1: But we simply restructured 467 00:21:49,950 --> 00:21:50,919 Speaker 1: the mortgage. 468 00:21:50,930 --> 00:21:53,970 Speaker 2: I agree. I believe effort will be made to restructure mortgages, 469 00:21:53,970 --> 00:21:55,880 Speaker 2: you won't have people being thrown out in the street, 470 00:21:55,880 --> 00:21:58,360 Speaker 2: but there will be, I think perhaps a prolonged period 471 00:21:58,359 --> 00:22:01,850 Speaker 2: of stagnant prices, but just to take a step back again. 472 00:22:01,850 --> 00:22:05,530 Speaker 2: I think the affordability issue is ultimately, it's not going 473 00:22:05,530 --> 00:22:08,980 Speaker 2: to be solved in Singapore market by just trying to 474 00:22:08,990 --> 00:22:12,320 Speaker 2: change refill price is the primary way to actually really 475 00:22:12,320 --> 00:22:14,560 Speaker 2: get the dress is by making sure that there's enough 476 00:22:14,560 --> 00:22:17,879 Speaker 2: new construction to meet the needs of first time homebuyers 477 00:22:17,880 --> 00:22:19,649 Speaker 2: is actually the most pressing need. 478 00:22:19,890 --> 00:22:22,030 Speaker 2: Then I think on the margins you for all the 479 00:22:22,030 --> 00:22:24,219 Speaker 2: people who want to move into ready made property is 480 00:22:24,220 --> 00:22:26,310 Speaker 2: the second time as you've got people who for whatever 481 00:22:26,310 --> 00:22:28,790 Speaker 2: reason I don't like the BTS is offered and so 482 00:22:28,790 --> 00:22:31,070 Speaker 2: for them we are trying to make sure, I think 483 00:22:31,070 --> 00:22:34,050 Speaker 2: that the resale market is a bit more tolerable but 484 00:22:34,050 --> 00:22:35,550 Speaker 2: I think we shouldn't lose sight of the fact that 485 00:22:35,560 --> 00:22:38,030 Speaker 2: at least for the government, the primary mechanism of dealing 486 00:22:38,030 --> 00:22:40,260 Speaker 2: with all of this is to try to give people 487 00:22:40,260 --> 00:22:42,670 Speaker 2: the BTUs that they want hopefully in the areas they want. 488 00:22:42,670 --> 00:22:44,720 Speaker 2: But that's a very challenging thing to solve. 489 00:22:44,730 --> 00:22:47,770 Speaker 1: But that's not even the case. Walter is a very 490 00:22:47,770 --> 00:22:49,350 Speaker 1: simple formula if ever 491 00:22:49,359 --> 00:22:52,560 Speaker 1: every new home owner buys a B. T. O. Flat 492 00:22:52,570 --> 00:22:57,790 Speaker 1: and willing to wait it out. The reversal market will collapse. Yeah. 493 00:22:57,800 --> 00:22:59,429 Speaker 2: So there are lots of people who don't want to 494 00:22:59,430 --> 00:23:01,680 Speaker 2: wait or who do not like the options that often. 495 00:23:01,680 --> 00:23:04,690 Speaker 2: So you know basically they're the ones because 496 00:23:05,060 --> 00:23:09,760 Speaker 1: there's another technical problem if the HDB keep building Bto flats, 497 00:23:09,770 --> 00:23:12,200 Speaker 1: we will end up with a lot of surplus flat 498 00:23:12,200 --> 00:23:16,030 Speaker 1: that nobody wants and we can't afford that. And today 499 00:23:16,030 --> 00:23:18,820 Speaker 1: I think for every B. T. O. That's being launched, 500 00:23:19,119 --> 00:23:22,150 Speaker 1: they actually oversubscribed at least 5 to 10 times every 501 00:23:22,150 --> 00:23:25,609 Speaker 1: single exercise. So the demand is for homes are still there. 502 00:23:25,619 --> 00:23:27,720 Speaker 1: So instead of having videos where they build to order, 503 00:23:27,720 --> 00:23:29,230 Speaker 1: what if the government built first 504 00:23:29,500 --> 00:23:30,700 Speaker 1: and then release the flats. 505 00:23:30,710 --> 00:23:33,280 Speaker 2: So that was the policy that was followed actually in 506 00:23:33,280 --> 00:23:37,050 Speaker 2: the 90s. And the reason why that policy was terminated 507 00:23:37,050 --> 00:23:39,870 Speaker 2: was replaced with the current video system is that that 508 00:23:39,869 --> 00:23:42,689 Speaker 2: policy coincided unfortunately with a bit of overhang from the 509 00:23:42,700 --> 00:23:46,320 Speaker 2: Asian financial crisis, there was a general loss of demand 510 00:23:46,330 --> 00:23:49,600 Speaker 2: for housing in Singapore and government ended up with a 511 00:23:49,600 --> 00:23:52,490 Speaker 2: substantial number of unsold flats, which actually took quite a 512 00:23:52,490 --> 00:23:54,770 Speaker 2: while to actually put on the market and sell. And 513 00:23:54,770 --> 00:23:57,080 Speaker 2: in the real problem, I think it's not actually the 514 00:23:57,090 --> 00:23:58,060 Speaker 2: cost to the government 515 00:23:58,070 --> 00:24:00,929 Speaker 2: Coffers. The real problem is when you've got a huge 516 00:24:00,930 --> 00:24:03,750 Speaker 2: number of unsold flats, everybody knows that there are unsold 517 00:24:03,750 --> 00:24:06,730 Speaker 2: ready flats, the government hasn't stopped. Then if you're looking 518 00:24:06,730 --> 00:24:09,040 Speaker 2: to buy a resale flat or if you're a homeowner 519 00:24:09,040 --> 00:24:12,740 Speaker 2: looking your property values, that will definitely have a negative 520 00:24:12,740 --> 00:24:15,300 Speaker 2: effect on values. And so the real problem is not 521 00:24:15,300 --> 00:24:16,850 Speaker 2: the cause of the government is that you're going to 522 00:24:16,850 --> 00:24:19,899 Speaker 2: harm housing confidence in Singapore. And that is a huge 523 00:24:19,900 --> 00:24:22,290 Speaker 2: issue for 80-90% of Singaporeans. 524 00:24:22,300 --> 00:24:24,810 Speaker 1: And also if you want to keep housing affordable. I 525 00:24:24,810 --> 00:24:26,630 Speaker 1: think one of those things that they have to manage 526 00:24:26,640 --> 00:24:29,220 Speaker 1: of course the construction pipeline and things like that by 527 00:24:29,230 --> 00:24:32,270 Speaker 1: doing things ready and then selling later, that will defeat 528 00:24:32,270 --> 00:24:34,200 Speaker 1: the purpose of actually having economies of scale when it 529 00:24:34,200 --> 00:24:36,590 Speaker 1: comes to building and things like that as well. Well, 530 00:24:36,600 --> 00:24:38,669 Speaker 1: we've had a few different points of view and we 531 00:24:38,670 --> 00:24:41,490 Speaker 1: don't have a consensus, but that's good because I think 532 00:24:41,490 --> 00:24:43,380 Speaker 1: what we want is at the very least for people 533 00:24:43,380 --> 00:24:45,770 Speaker 1: to understand a bit more about the system and very 534 00:24:45,770 --> 00:24:48,490 Speaker 1: quickly there are some of our listeners who are looking 535 00:24:48,490 --> 00:24:51,369 Speaker 1: to buy a property now, just got married, want to 536 00:24:51,369 --> 00:24:53,830 Speaker 1: get a home in the next two years, what advice 537 00:24:53,830 --> 00:24:55,119 Speaker 1: would you have for them? What you 538 00:24:55,210 --> 00:24:58,400 Speaker 1: first by the bullet by it, it may just get 539 00:24:58,400 --> 00:24:59,550 Speaker 1: worse walter, think 540 00:24:59,550 --> 00:25:01,359 Speaker 2: about what you really want, right, Do you want a 541 00:25:01,359 --> 00:25:03,449 Speaker 2: home or do you run an investment? You can have 542 00:25:03,450 --> 00:25:05,199 Speaker 2: both at once, sometimes, I think that what you have 543 00:25:05,200 --> 00:25:05,920 Speaker 2: to think about, 544 00:25:05,930 --> 00:25:09,369 Speaker 1: good point stay prudent. And then the other thing to 545 00:25:09,369 --> 00:25:12,040 Speaker 1: think about is do you want to be uncomfortable now, 546 00:25:12,050 --> 00:25:16,439 Speaker 1: comfortable later or comfortable now uncomfortable later, so that's actually 547 00:25:16,640 --> 00:25:19,580 Speaker 1: what I have to think about. So when you say 548 00:25:19,580 --> 00:25:22,990 Speaker 1: comfortable now, uncomfortable later in terms of mortgage. So a 549 00:25:22,990 --> 00:25:23,770 Speaker 1: lot of people, they 550 00:25:23,780 --> 00:25:26,010 Speaker 1: they tend to stretch a lot when they're younger because 551 00:25:26,010 --> 00:25:28,820 Speaker 1: of and things like that. There's one thing to really 552 00:25:28,820 --> 00:25:31,500 Speaker 1: think about, especially when interest rates are rising. Okay, well, 553 00:25:31,500 --> 00:25:33,530 Speaker 1: thank you all so much for coming and sharing your 554 00:25:33,530 --> 00:25:36,210 Speaker 1: thoughts with us. Thank you for the very robust discussion. 555 00:25:36,210 --> 00:25:38,450 Speaker 1: I think it's a very complex issue housing in Singapore 556 00:25:38,460 --> 00:25:40,640 Speaker 1: and for many that first home, you know, it's just 557 00:25:40,640 --> 00:25:44,209 Speaker 1: the beginning, it's at home, but it's also an investment property, 558 00:25:44,210 --> 00:25:47,230 Speaker 1: so you can't really tear them apart and with all 559 00:25:47,230 --> 00:25:50,399 Speaker 1: things that are always competing interests, which essentially means not 560 00:25:50,410 --> 00:25:52,340 Speaker 1: everyone can get what they want. 561 00:25:54,050 --> 00:25:56,550 Speaker 1: Thanks to my guest to our listeners as well for 562 00:25:56,550 --> 00:26:00,070 Speaker 1: providing their insights on this issue. The team behind this 563 00:26:00,070 --> 00:26:04,650 Speaker 1: podcast is Jacqueline, chan Joanne chan daniel lee and Christina robert. 564 00:26:04,660 --> 00:26:06,719 Speaker 1: And if you have any feedback, I would like to 565 00:26:06,720 --> 00:26:08,740 Speaker 1: get in touch with us. You can drop us an email, 566 00:26:08,750 --> 00:26:12,270 Speaker 1: C N a podcast at Mediacorp dot com dot SG. 567 00:26:12,280 --> 00:26:15,710 Speaker 1: Would love to hear from you. I'm steven signing off.