[redbean]

Good news to HDB owners

The tax department has confirmed that the annual value(AV) of their flats have gone up because the values of the flats have gone up and also, these flats can now fetch higher rentals. And the increases were very small given the huge increases in the resale prices of flats. Compare to increases in values of tens or hundreds of thousands, a hundred dollar increase is chicken feat really. I am sure all flat owners would not mind paying more taxes if their flats can be sold for a million or two.

And good news for the smaller flat owners. They don't have to pay for the higher property tax. There is a one year rebate! Only the bigger flats need to pay, and the bigger the flats, the bigger the tax increases except for bigger executive flats.

But the statisticians will have reasons to be argumentative when they look at the percentages of increases. A 3 rm flat will have to pay $72 more from $2.17. Now how many hundred percent increase is that? Every $2.17 is 100%. The number is too big for my calculator. A ball park number is like 3,600% increase! 4 rm flat will pay $97 more from $46.96. This is easily 200%! 5rm and executive flats have smaller increases of about 100%.

I am not going to split hairs on these increases and why the smaller and obviously poorer flat owners should be hit with that kind of percentage increases. What I am looking at is that the majority of HDB flat owners are living in their own flats, their homes, not for letting and also there are many rules prohibiting them from renting their flats.

The AV can shoot to the sky, but many HDB flat owners cannot benefit from them. No renting, cannot rent. Only those who need the money or those who have many properties can benefit from the high AVs. Why lump all HDB owners into the same category and make them pay higher taxes when the benefits of high AV is academic and perceived, unreal?

For those who are waiting for the flats to hit $1m, no problem. Let the AV go higher. When the $1m target is rich, just sell and get out of the property ownership trap. Oops, 99 year property leasing trap to some.
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what i posted is just my personal view. feel free to disagree.

[redbean]

The disproportionate reality and disproportionate truth

Properties in Singapore are cheap, especially the high end ones that are built for the super rich. At $3m or $5m a piece, it is too easily affordable. Many of the super rich will find properties at $20m or $30m a piece affordable as well. At the employee level, ie workers who earn a salary, this includes ministers and top civil servants, properties at $3m or $5m are actually as expensive as peanuts. They could buy one every year or every other year with their annual salaries. Isn’t that fun? Life is really good for these highly paid workers.

Then we have workers, the genuine low down working class, complaining that a $300k flat is expensive and unaffordable. And the ministers and top civil servants are telling them it is not so. These flats are really and truly affordable. It makes sense when one could pay a $3m to $5m property with one or two year’s salary. But the disconnect is quite obvious.

Why are the workers complaining? Simple, their incomes are just too little relative to the price of the flats they have to pay. And they need two incomes and 30 years to be able to pay that miserable $300k. So, is their complaint genuine or they are just a pain in the arse?

To these lowly paid workers, their perspective of affordability must be different, and real. They think so anyway. The cheap flats are expensive, very expensive to them. And the reality of the cheap private properties is also real, as the buyers need only cough out a couple of year’s income to pay them off. No need to take loans at all.

The disproportionate reality and the disproportionate truth divide the real workers from the surreal workers in paradise. Quite funny huh?

The article is copied from Asian Correspondent.
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what i posted is just my personal view. feel free to disagree.

[redbean]

When will the balloon burst?

There are many things that we are paying through our nose and are taken for granted as our way of life. The question is whether we should be paying so much for them, and if we can afford to key paying for them.

Our housing is going the way of Hongkong and Tokyo. Our cheap public housing is no longer cheap anymore. And we will make them more expensive for the good of the people who have bought them. But someone must pay for it and keep the balloon from its unstoppable inflation.

We are paying for cars that cost about one third of its import price. For $50k or $60k, we could be driving much bigger and more luxurious made cars. Or we could be driving the same cars and saving a fortune from it. How much does a Toyota or Honda cost really? And how much is a Mercedes or a BMW? Are we being shortchanged?

And our medical cost is skyrocketing like hot air. Funny thing is that there is a ruling against doctors overcharging their clients. The complicated surgical procedures and the expensive and sophisticated equipment will add to the cost. What about cough and colds, tooth extraction or fillings? The way it is going, another big chunk of our income will have to be set aside to pay for medical cost.

Then we have to pay astronomical salaries to ministers, and some are still complaining. But this is the cheapest to pay for. Just one plate of kway teow or maybe add another plate every time they increase their salaries will solve it. This one is cheap really when the cost is spread around to every Singaporean.

The good thing is that Singaporeans can afford to pay for all the extraordinary costs of things which need not be. And there is no fear of the balloon bursting as long as we can keep paying our people more and more salary to feed all the high cost items.

Can we really continue to pay our workers higher and higher salary in a competitive and interconnected world? Why should our cleaners by paid $1000 pm when other countries are paying them $300? Why should our average workers by paid $2000 pm when others are paid less than half of that amount? Can productivity really solve this imbalance? Use more machines and computerisation and lesser manpower?

Starting from the worker's level, once they cannot feed the system to pay for their cost of living, the effect will be felt to the next levels. But some levels will be so insulated that nothing will happen to them even if the dam breaks. For now, the magician and his magic wand is still doing wonderfully and paying for ever more expensive items for a living seems to be easy.
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what i posted is just my personal view. feel free to disagree.

[redbean]

Are we better off?

An analysis of the UBS study: Singapore has the lowest wages and domestic purchasing power among the Asian Tigers

By Eugene Yeo, Consultant Editor
The worldwide study conducted and released by UBS lately, titled “Price and Earnings 2009″ has some unflattering results for Singapore. (download the study here)
While our economy has the highest GDP (PPP) per capita in Asia at $49,288 according to a World Bank report (source:Wikipedia), our people do not enjoy a quality of life which commensurate with it.
Though we are technically a developed first world country, some economic indictators as shown by the UBS study suggested that Singaporeans are not that better off than those in Third World countries.

Low wages
Singapore has a GDP (PPP) per capita higher than Switzerland, but our wages are way below the Swiss.
The UBS study found that employees in Copenhagen, Zurich, Geneva and New York have the highest gross earnings. With its extremely high gross wages and comparatively low tax rates, Switzerland is a very employee-friendly country.
The net wages used have been deducted for taxes and social security.
Zurich and Geneva have wage indices (gross) of 119.8 and 107.5 respectively. In contrast, Singapore has a wage index of only 31.3, comparable with Moscow (30.9), Tallinn (28.7) and Johannesburg (26.7).
In the Asia-Pacific region, it is exceeded by Tokyo (83.0), Sydney (74.1), Auckland (44.1), Hong Kong (42.3), Taipei (35.5) and Seoul (32.3)

Low domestic purchasing power
Where does an average income buy the most products and services? Wages alone do not determine the standard of living in a particular city or country.
A better way to measure prosperity is to divide the average annual salary by the total price of a selected basket of goods and services (as used in the UBS study). This tells us how much purchasing power local wages.
Again, Zurich (106.9), Sydney (95.9) and Luxembourg (95.4) topped the list – its citizens have the highest domestic purchasing power.
Singaporeans have a low purchasing power of only 39.9, comparable to Kuala Lumpur (39.5), Warsaw (34.0) and Bogota (33.7).
Other countries in the Asia-Pacific region which are ahead of us are Tokyo (82.2), Auckland (68.9), Taipei (58.9), Hong Kong (58.1) and Seoul (57.4).
In other words, though the cost of living is higher in Tokyo, the average Japanese has a domestic purchasing power more than twice that of an average Singaporean.
Though Malaysia is still a developing country and has a GDP (PPP) per capita of only $14,215, less than 3 times of ours, the ordinary Malaysian citizen has about the same domestic purchasing power as the Singaporean.

Low relative purchasing power of wages
This is calculated in the UBS study by using a specific, highly uniform product that is available everywhere in the same quality, and then calculate how long an employee has to work to afford it in each city.
For the purpose of this article, the iPod nano (with 8 GB of storage) is used.
An average wage earner is Zurich and New York can buy a nano from an Apple store after nine hours of work. A Singapore worker will have to work three times longer after 27..5 hours.
The figures for selected Asia-Pacific cities are as follows: Sydney (9.5hrs), Tokyo (12hrs), Auckland (16hrs), Hong Kong (19hrs), Seoul (22hrs) and Taipei (23.5hrs). Again we came in last among the 4 Asian Tigers.

Long working hours
People work an average of 1,902 hours per year in the surveyed cities, but they work much longer in Asian and Middle Eastern cities, averaging 2,119 and 2,063 per year respectively.
European cities had the lowest working hours per year. A global comparison showed the people in Lyon and Paris spend the least amount of time at work: 1,582 and 1,594 hours respectively.
Singaporeans spent on average 2,088 hours at work per year with 11 days of vacation.
This is less than Hong Kong (2,295) and Seoul (2,312), but more than Tokyo (1,997), Taipei (2,074), Sydney (1,747) and Auckland (1,884).
Singaporeans also took the least number of holidays after Hong Kongers (10 days/year).

High cost of living
Singapore was ranked the second most expensive place to live in after Tokyo, surpassing Hong Kong for the first time.
Let us compare the food prices in Singapore and other developed countries since food is a basic necessity.
In the UBS study, a basket of 39 food items is put together and weighted mainly according to Western European consumption habits. The average worldwide cost of the basket is USD385.
In Asia, Tokyo topped the list with an index of 124.7, followed by Hong Kong (96.5), Singapore (89.4), Seoul (89.0), Taipei (67.9) and Sydney (66.3)

Conclusion
The high cost of living coupled with low wages and domestic purchasing power condemns the average Singapore worker to an ignonimous, monotonus and stressful working life.
Singapore workers have to work harder to earn the same amount of money and save for a longer period to purchase the same product.
In 1991, then Prime Minister Goh Chok Tong promised Singaporeans that we will be able to achieve the “Swiss standard of living” within a decade. Ten years later, we have a living standard which is closer to Russia than Switzerland.
Like Singapore, the Russians has a low wage and domestic purchasing power and Russia, especially the city of Moscow, has one of the highest cost of living in the world.

The above article was emailed to me and I am not sure which paper was it published, most probably the ST or Business Times.
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what i posted is just my personal view. feel free to disagree.

[redbean]

Our public housing are affordable

Who is complaining that our public housing prices are high and not affordable? The higher prices are due to our higher incomes and increased prosperity. And for those who are complaining, be advised that nothing is expensive. It is only a matter of whether you can afford to pay for it.

So don't complain if you can't pay for it. To those who can, it is simply affordable.
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what i posted is just my personal view. feel free to disagree.

[redbean]

High property prices good.

It is high only because our economy is doing well, an indicator of prosperity and also high wages. Why are there sudden measures to curb high property prices? We are receiving plenty of confusing and conflicting signals nowadays. One day good one day something else. Plenty of supply, no panic but panic building.

Why are people, especially the young, still complaining when their salaries are also shooting to the stars? The only problem I can see is that while their salaries are heading for the stars, the prices of properties are reaching to another dimension, and they are continuously chasing and not getting near. Then again it is their fault because they are not talented enough to earn faster and more.

The developers and speculators are always delirious when property prices are soaring. They have no responsibility to anyone except their own greed and profits. They will do anything to double or triple their profits at all cost. Who cares about the well being of the people in general.

The bulk of the people just want a decent place to stay, a roof over their head that is affordable. I want to print this word in very small prints, 4 or 6 points. Cannot say it too loud. Otherwise people will scream that it is definitely AFFORDABLE.

The govt has a very big responsibility for the well being of the majority of the average citizens. The rich and able will look after themselves and speculate in properties and all things to get richer. The small people in the middle are not so fortunate and could only depend on their Very High Salaries but not high enough to pay for the affordable flats and to get by. They cannot afford to chase the property prices dictated by the speculators and developers or the blameless, market forces. These innocent, and losers, will end up as bigger losers.

The govt has a responsibility to take care of them by correct policies. Mindless market policies will definitely lead to disillusion among the masses and will alienate them to vote for a party that will look after their welfare. Govt has the choice of looking after whichever sector of the people they want to. They can choose to continue to feed the fat cows and they can choose to care for the lean goats.

High property prices are good. Keep raising. Don't stop. Don't build and strangle the supply and let the price rises. 80% or 90% of the people will be very happy and grateful.
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what i posted is just my personal view. feel free to disagree.

[redbean]

Singaporeans getting richer

I was reading Goh Meng Seng's latest post in which he quoted an official statistics that reads like this, 'The average household income from work had also risen from $4,238 in 2003 to $5,680 in 2008, reflecting the growing affluence of HDB households.'

Isn't this good news, that the average household income was $5.680. Today, two years later, it should be more than $6,000. Singaporeans no need to go to the casino to shout 'huat ah!' They can now do it at home.

My friend's household income in $9,000! Lagi huat. 6 pay checks, average about $1,500 each, and two more paychecks akan datang. That would put his household income to more than $10,000 when the youngest two children start working.

Goh Meng Seng argued that the household income surge is due to children unable to buy HDB flats and are forced to stay with their parents, thus boosting household income higher. Tiok boh?

With $9,000 or $10,000 household income, can start to buy private property liao. How come ah? Still staying in HDB flat.
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what i posted is just my personal view. feel free to disagree.

[redbean]

High property prices no good!

Today I feel quite 'tulan'. Only on Sat I posted an article saying that high property prices good. This morning I read Mah Bow Tan saying high property prices no good. How can he disagree with me? And he said that he has some more things planned to curb property speculation and high prices. But there are good news for those who could not afford to buy HDB flats because of high prices.

So far, no bubble has formed, despite the fact that anyone buying a property from HDB ten years ago will now see the same property appreciated by 200%, there is no bubble still. Well, good then, as this is due to normal price appreciation in a good economy, low interest rate and a confluence of other factors. But HDB is not going to go to sleep. It is doing a review to see what it should do to prevent speculation and bubble building.

Hsien Loong has joined in the discussion by saying that HDB flats are not for speculation but a long term investment and for the buyers to live in, even to hand down to their children. Is this a policy statement? If it is, it will signal a major change in where public housing is heading. But he must get this message to the HDB first. Then hopefully, things will change and people will really be able to afford affordable HDB flats. I always cringe when I mention the word affordable. Probably developing a phobia for it. It sounds so cheap.

By the way, the General Election is around the corner and maybe we have some real policy changes for the good of the people. And no changes after that.
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what i posted is just my personal view. feel free to disagree.

[redbean]

Cost of living in Cloud Nine

Temasek Review, TOC and several blogs have reported that the budget provided for a 8.8% increase in ministerial salary. The hint is that this is outrageous given that the workers are being asked to be cheaper, better and faster. Superficial impression will make many to agree with such a perception. How could the ministers still be thinking of raising their sky high salaries?

Then think again. The workers need not have to have any salary increases, or the increases need not be too high as property prices, I mean public housing, are very affordable. Compare to the prices of private properties, each costing $5m to $10m, it is tough to buy such properties. And 8.8% increase of a $1m salary is only $88k, $2m salary is $196k and $3m salary is only $264k. It will take several years of savings to buy a private property with this kind of small increases.

It is thus unfair to frown upon the 8.8% increases as we cannot compare apple with oranges. The cost of living in high society is very high. Properties are expensive and so are luxury cars and overseas holidays. Even the meals are costing that much more. I can't remember how much it cost for cooking class in France.

The increases should be comparable with the increases in the cost of living and property prices in the stratosphere. Only then will it be fair. It will be more appropriate to provide for a bigger raise in order to minimise their hardship. Without a pay hike, life can be very tough with a $1m or $2m or even a $3m income.

The people should not complain and should count their blessings. At least they need not have to keep on worrying about where and how to get those millions to pay for the high cost of living.
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what i posted is just my personal view. feel free to disagree.

[redbean]

University fees increased, electricity increased, sigh, fee increases are no longer exciting news. It is happening almost daily so I am feeling tired of writing about them. Even rental of market stalls can shoot up for no good reason except a change of owners.

HDB flat selling at $650k not high enough. Now Bishan EM selling at $900k with $170k COV.

What else is going to go up? Salary, yes salary must go up or else who can afford to buy those multi milllion dollar properties. As for worker's salary, tkk. Worker's salary got to be kept competitive, not low, or else all the jobs will go away.

Prices of cars were the highest in the world and are jumping higher. No country can ever dream of beating us on this.
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what i posted is just my personal view. feel free to disagree.

[redbean]

What comes after COE hike?

The surge in COE prices must have brought smiles to many people and to the state's coffer. Maybe some will filter down to help the needies. But what else will be affected by this COE good news? The car owners will be affected immediately and positively with the resale values going up.

On the negative side, taxis and buses, I think they need COEs too. So be prepared for higher taxi fares and maybe bus fares. Hopefully the MRT is not affected by COE hikes and would not raise MRT fares. But their staff travel by cars and vans. So the hike still affects their cost.

All transport agencies or businesses will be affected if the cost of vehicles goes up. And this will just trickle down the line for sure. This is one thing that must be passed down to the consumers. School buses?

The cost of living will move up nicely.
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what i posted is just my personal view. feel free to disagree.

[redbean]

A fare cut, a fare cut!

Public transport fare to go down by 2.5%, reported Today. Cheaper transport fare from July 3, reported mypaper. So we have a fare cut, a fare cut, or a fare hike! Which is which? I copied below extract from "Blowin' in the wind" blog for ease of comparison.

The Straits Times reports public transport fares will dip by 2.5 per cent from July 3, but savings will vary from commuter to commuter.

The fact is fares are going up --- appreciably for longer journeys. While the minimum fare for the first 3.2km on an airconditioned bus is going up by just two cents from 69 cents to 71 cents, commuters will have to pay up to 10 cents more for every kilometre after that. And it is going to make a difference.

The longest trip now on an air-conditioned bus with an EZ-link card costs S$1.65 cents, according to the SBS Transit website.

The same trip with the same card will cost S$1.94 from July 3, according to the Public Transport Council.

So we have a fare cut for some and a fare hike for some. So, shall we call it a fare cut or a fare hike? Beats me really.
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what i posted is just my personal view. feel free to disagree.

[redbean]

Affordable Sultan Fish

'...a 35-year-old diner, Mr Liu, and four friends who feasted on a steamed fish dish called the white sultan fish at the high-end Feng Shui Inn restaurant on June 12 at Resorts World Sentosa (RWS). ' This is quoted from Yahoo News.

Wow, Singaporeans are truly one of the richest people in the world. A 1.8kg fish, called Sultan Fish and reputed to have silky white meat that tasted like fruits cost S$1,224! The fish is noted to be vegetarian as it eats fruits fallen from trees. That is why it is so exquisite in taste and price.

Each mouthful will cost $100! Must be more expensive than the best caviar.
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what i posted is just my personal view. feel free to disagree.

[admin]

Fifth straight hikes in Electricity prices

'Electricity prices will rise by an average of 2.4 per cent this quarter – from 1 July to 30 September. The new rate for households will be 24.13 cents per kWh, up from last quarter’s 23.56 cents per kWh.

This is the fifth straight quarterly rise in electricity rates. Compared to Apr 2009, electricity tariff for households has increased by 33.8 per cent.'

The above was copied from Temasek Review.

[redbean]

Another dangerous scheme brewing

The ERPs and COEs were designed to control the number of cars on the road and to ensure that traffic flow in the highways is smooth and of an acceptable speed. Looks like these objectives are going to be forgotten soon with the thought of using satellites to monitor cars on the road, for effective and efficient collection of revenue.

Now the thinking seems to be on how to charge motorists for road usage. Does this mean that motorists will be charged regardless of whether they are travelling in the highways or in little roads in the estates or in Kranji or Sembawang? Hey, driving inside the HDB may also be charged if we are not careful. So, motorists not causing congestion, or trying to take smaller roads, travelling longer distances, will not escape the dragnet.

I am seeing the goal posts wavering as if they are going to be moved.
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what i posted is just my personal view. feel free to disagree.