CM6 is still possible

[richwang]

I have just come back from a short visit to China. The cooling measure there is unbelievable:

1) If you are not the resident of the city, you simply cannot buy property for that city;
2) Even if you are the resident of the city, for 2nd property, you can only make 50% loan. When asked for a bank, they simply replied their loan quota has been used up. So no loan for 2nd property;
3) In resale market, it is almost impossible to get loan even for 1st property if the property is 10 years old (that is 60 years lease left).

Have the price of the property in China drop? Surprisingly not many people selling. Those holding multiple properties are fully paid up. The price "drop" is mainly because new properties are in more remote area (1.5 hr by train rather than 1 hr by train.)

I was shocked by Singapore government CM5 before I visited China. But now, when we benchmark on an international level, CM6 is still possible:

CREDIT will be made less available for non-Singaporeans.

Thanks,
Richard

[mcmlxxvi]

Bro Rich, you convert to Singaporean or PR already right?

[amk]

Btw you should go tell the other guy your findings of the "drop" in china pty market.

And seriously, no one really understands the china pty phenomenon. This is a country where it's a norm to buy pty in full cash.

So dun compare that with SG.

[Laguna]

China is a different market.
1. They dun like to buy second hand properties (other than some prime properties in tier 1 cities) even it is never been occupied before, as no face which is very important

2. Peer pressure in owning properties

3. Huge supply, new supply from developers. The size of their projects run into >10,000 units in a condo project. Somehow, they only believe in buying properties from developers.

4. Too much cash, and they dun trust the banks. So properties is more tangiable.

5. Properties can be passed on to their children.

Currently, the number of completed vacant properties should be around 65m units.

The cooling measures in China are very very hash and there is some more downside.

As for foreigners, I understand there are ways to buy....if u dare to do it...

[richwang]

I have been in Singapore for 18 years. And yes, I am a Singapore citizen now.
My point is when China has such a strict restrictions of buying properties, the money will flow to Singapore.

I took Singapore Airlines with my son (who is a true Singaporean - only trust SQ). I didn't realize how serious the problem is.

My wife took China Airlines. She told me more than half of the passengers are rich Chinese kids attending O Level English preparation schools here. I won't be surprised some of their parents will find 10% Additional Stamp Duty is nothing compared with the measures in China. So they will still buy the property here.

The fixed deposit rate in China is 3% for 3-month, and 5% for 5-year. The property loan rate is 7% there. With 1% loan rate here, it's possible they will make a loan for "carry trade" or buy better property.

So CM6 is likely to cut the credit for foreigners.

Thanks,
Richard

[ysyap]

If Euro crisis hit, there no CM6 at least for a long long time.

[kane]

If Euro crisis hit, there no CM6 at least for a long long time.

Cm3 and 4 will probably be lifted as well..

[avo7007]

If the global sh@t hits the fan, all CMs will be taken out, and "Heating Measures" implemented.

[teddybear]

By then, too late! "Heating Measures" may be useless, look at past experience from 2001-2005. All "heating measures" useless until global economy pick up!
When price can move up they cap them with stupid policies, when price crash they implement all sort of "heating policies" also useless until global economy recovers! Ops!
How I hope the GE is held in Jan 2013 after the price crash! Will be super interesting! The person who said to mastermind CM5 will be???

If the global sh@t hits the fan, all CMs will be taken out, and "Heating Measures" implemented.

[ikan bilis]

If Euro crisis hit, there no CM6 at least for a long long time.

Cm3 and 4 will probably be lifted as well..

If the global sh@t hits the fan, all CMs will be taken out, and "Heating Measures" implemented.

hahaha.... i like you guys !!...



but, from the way usa+europe+japan is printing $$,... i'm expecting at least got cm6 & cm7 coming...

[ysyap]

hahaha.... i like you guys !!...



but, from the way usa+europe+japan is printing $$,... i'm expecting at least got cm6 & cm7 coming...

Europe is still the biggest question mark... Not too worried about the other 2 countries.

[rattydrama]

Our Ah Tiong will help soak up. In 2001-2005 we dont have rich Ah Tiong here.

In China, was told, u walk on the street any moment can hit a multi- millionaire.

By then, too late! "Heating Measures" may be useless, look at past experience from 2001-2005. All "heating measures" useless until global economy pick up!
When price can move up they cap them with stupid policies, when price crash they implement all sort of "heating policies" also useless until global economy recovers! Ops!
How I hope the GE is held in Jan 2013 after the price crash! Will be super interesting! The person who said to mastermind CM5 will be???

[rattydrama]

Europe is still the biggest question mark... Not too worried about the other 2 countries.

tourism is still suffering in Japan. Yen moved up so much probably due to investors hoarding up the Yen and insurance company need to pay in Yen.

should buy some yen in March 2010.

[Rysk]

Property prices in Beijing up 500% as compared to S'pore up 50% for the last 5-years..
CM for China is understandabe.. but for S'pore, need to increase more CM meh?

[roly8]

so jialat

[sh]

hahaha.... i like you guys !!...



but, from the way usa+europe+japan is printing $$,... i'm expecting at least got cm6 & cm7 coming...

so you think prices are still going up until cm6 & cm7? quick buy!

huat ah!

[ikan bilis]

so you think prices are still going up until cm6 & cm7? quick buy!

huat ah!

hahaha... you already kena caught jialat jialat in CM1-CM5 liow.... what's the use of buying now and kena 16% SSD lock down 4yrs, dead resale market make you can buy from developer and cannot sell, and another 3% ABSD...

coming next CM6 will be to squeeze those with more than 1 property, CM7 will be to squeeze all pte properties owners, CM8 will be to freeze the market completely, plus CM9.... hahaha...

[thomastansb]

To add on, CM have never been effective when economy is sailing. To me, CM5 is not going to be effective at all. CM5 just undermine meritocracy. I work hard, I earn more, I get penalised for buying private properties. It has to be one of the worst decision by PAP so far.

By then, too late! "Heating Measures" may be useless, look at past experience from 2001-2005. All "heating measures" useless until global economy pick up!
When price can move up they cap them with stupid policies, when price crash they implement all sort of "heating policies" also useless until global economy recovers! Ops!
How I hope the GE is held in Jan 2013 after the price crash! Will be super interesting! The person who said to mastermind CM5 will be???

[maisonjai]

Have the price of the property in China drop? Surprisingly not many people selling. Those holding multiple properties are fully paid up. The price "drop" is mainly because new properties are in more remote area (1.5 hr by train rather than 1 hr by train.)

i just came back from SH as well, their lease 50 or 70 yrs. Heard from my SH friend that SH ppty prices are flat at the moment. i told him i read reports that price dropping 20%<, next day he drove me out abt 1hr drive on highway to the outskirts & told me these are the ones dropping. Wah lau blocks & blocks of empty apts, no amentities, no supermkt, no shops, no public transport. i asked him w/o cars no way to access here right? He smiled.

[sgp_condo]

To add on, CM have never been effective when economy is sailing. To me, CM5 is not going to be effective at all. CM5 just undermine meritocracy. I work hard, I earn more, I get penalised for buying private properties. It has to be one of the worst decision by PAP so far.

Totally agree. PC are for the 20% ..........
Gov should take care of the low income ones than the kpkb.

[samsara]

PAP has definitely lost my vote in the next GE.

To add on, CM have never been effective when economy is sailing. To me, CM5 is not going to be effective at all. CM5 just undermine meritocracy. I work hard, I earn more, I get penalised for buying private properties. It has to be one of the worst decision by PAP so far.

[rattydrama]

PAP has definitely lost my vote in the next GE.

how can bring back your votes?

[samsara]

All I ask is that they practise what they preach. If they advocate meritocracy, then their policies should be reflective of that. However, if they no longer advocate meritocracy, they should publicly retract what they have been expounding all these years.

挂羊皮卖狗肉 is definitely not going to win public confidence.

how can bring back your votes?

[Laguna]

they hv the CM, but on other hand, when developer bids land at lower price (paya lebar), then they dun award....

[sh]

hahaha... you already kena caught jialat jialat in CM1-CM5 liow.... what's the use of buying now and kena 16% SSD lock down 4yrs, dead resale market make you can buy from developer and cannot sell, and another 3% ABSD...

coming next CM6 will be to squeeze those with more than 1 property, CM7 will be to squeeze all pte properties owners, CM8 will be to freeze the market completely, plus CM9.... hahaha...

Actually the CMs 1 to 3 didn't deter me. The earlier CMs are targeted at flippers, have little or no impact on long term investors. CM3 30% downpayment was harsh, but I still bought.

The property that I got under CM3 has gone up at least 20%, and giving me good yield. I'm happy with my purchase and will continue to hold it for the long term. so I'm not "kena caught jialat jialat in CM1-CM5".

CM4's 40% downpayment was too much.... also no more bullets after the last purchase. Currently accumulating bullets.... so CM5 may do what the CMs are supposed to do, bring prices down.... then I can buy again.... hehehe.....

Meanwhile... window shopping continues....

[howgozit]

All I ask is that they practise what they preach. If they advocate meritocracy, then their policies should be reflective of that. However, if they no longer advocate meritocracy, they should publicly retract what they have been expounding all these years.

挂羊皮卖狗肉 is definitely not going to win public confidence.

This is not a political post.

But I think you may have misunderstood the meaning of "meritocracy" which pertains to reward and promotion based on talent and competence.

Why in your opinion are the cooling measure a renunciation of meritocracy?

[samsara]

Thanks for your post.

My interpretation and understanding of meritocracy is "the provision of equal opportunities in the environment for development, growth and progress to all participants, regardless of their background, creed and color; the allowance for outcomes based on individual capability and performance in the system".

The key idea in this is "equal opportunity". The opposing idealogy is "equal outcome" which refers to "the push for similar, if not identical, results for all participants regardless of their background, creed and color".

Both "equal opportunity" and "equal outcome" are mutually exclusive because their bases are totally inverse of each other.

Over the years, the message that has been communicated (repeatedly drilled) to the people is that meritocracy is the way forward and that everyone should be given access to the same opportunities while their performance and capabilities will determine their rewards.

The cooling measures negate the principles of "equal opportunity" by adjusting the playing field based on the traits of the individual participant. No longer is the individual participant given the right to perform based on his resources and abilities (in the property market). Instead, he is penalised for having exceeded an invisible threshold which is determined by the state.

My view is that are two ways of carrying out market equalisation. The first approach is top-down by slowing down those leading the pack. This appears to be the motivation behind the implementation of the cooling measures. The second approach is bottom-up by granting/increasing advantages to those who are trailing so that they have a better chance of catching up.

Between the two, the latter requires more time to take effect because it is also dependent on the willingness and industriousness of those who are trailing to utilise the advantages effectively. However it is fairer across the board than the former because it does not directly penalise the leading participants.

Last but not least, consistency is important when it comes to policies. This is because this affects the view that the world has of our country. For years, the world has seen Singapore as a transparent and politically consistent country that allows for equal opportunities atop an objective platform. The latest cooling measures have turned that view upside-down and expose us to the risk of being bundled into the same heap as the rest of our neighbours.

If our stand now is that social welfare takes precedence over meritocracy, it is important that the message be clearly spelt out so that there is no ambiguity. This will go the distance and reduce uncertainties in the property market instead of casting shadows that vary according to the time of day. The reduction of uncertainties will help to set a clearer direction for all who intend to buy/sell for investment or own-stay.

Having said all these, I would like to clarify that there is a third group in the considerations - the physically and mentally handicapped who lack the essentials necessary to compete in this environment. This group should be taken care of by the state and they should not be subject to the ideals of meritocracy.

Should you manage to finish reading the WOT (wall-of-text) above, a big thank you for your time and patience.

This is not a political post.

But I think you may have misunderstood the meaning of "meritocracy" which pertains to reward and promotion based on talent and competence.

Why in your opinion are the cooling measure a renunciation of meritocracy?

[howgozit]

Thank you for an interesting read.

Alas, our contention lies with the definition of "meritocracy" and thus cannot be resolved.

My idea of meritocracy is a system that advances people with ability as opposed to one that advances those with wealth. In that respect, the cooling measure is not an affront to meritocracy.

It can be argued that one with ability would invariably acquire wealth and hence be penalised by the cooling measure. This indirect link in my opinion would be incorrect because people with no abilty can be wealthy and people with ability may not be wealthy.

If you look at most tax systems(including Singapore), you will see that the higher your income, the higher the tax rate. Would you consider this a violation of meritocracy?... Of course not.

[samsara]

Thanks for your reply.

I agree that there are differences in our interpretation of meritocracy and that these are probably the roots of our differences in opinions.

For discussion purposes, do you agree with the following premises?

i. Those who possess wealth but do not have the ability will quickly lose it.

ii. Those with ability will be able to surmount difficulties faced when trying to grow their wealth.

If so, in time there should be convergence of the two i.e. the ones with ability will also become the ones who are wealthy (provided of course that they are interested in wealth in the first place). This is the primary consequence of a capitalist system.

Perhaps I am just being pedantic but my grouse with the policy-makers is not that they have implemented the cooling measures but that the nature of these measures is not in keeping with the messages that they had been putting forth (meritocracy, pro-investment, etc).

Income tax has always been part and parcel of living and working in Singapore. Any one who earns an income, be he wealthy or not, is well aware of the existence of the tiered structure of this form of taxation. The rules are laid out before him and he begins the journey of wealth creation with the understanding that high income earners will be taxed more than the rest.

Though we have our differences in opinions, I really appreciate the effort that you have made in keeping this discussion amicable.

Thank you for an interesting read.

Alas, our contention lies with the definition of "meritocracy" and thus cannot be resolved.

My idea of meritocracy is a system that advances people with ability as opposed to one that advances those with wealth. In that respect, the cooling measure is not an affront to meritocracy.

It can be argued that one with ability would invariably acquire wealth and hence be penalised by the cooling measure. This indirect link in my opinion would be incorrect because people with no abilty can be wealthy and people with ability may not be wealthy.

If you look at most tax systems(including Singapore), you will see that the higher your income, the higher the tax rate. Would you consider this a violation of meritocracy?... Of course not.

[peterng8]

I think a suggestion would be to bring this up during the meet the people seesion which is a MP regular activity, maybe he would be able to explain more...based on garmen view on meritocracy in a borader context in respect of running a country...