In addition to $335 million in the pipeline announced 5 years ago, the National Development Ministry has recently announced they will pump in a further $450 million funding to increase construction productivity.
It is official: Singapore property bubble has burst.
According to the Singapore Real Estate Exchange, 3 out of 10 HDB flats are sold below valuation price. 8 areas particularly affected are Bishan, Geylang, Jurong West, Punggol, Sengkang, Sembawang, Woodlands and Yishun. This news signal the beginning of the property bubble burst which have seen the resale price index hitting 200 in 4Q 2012 [Source]. The current resale price index registered 2 consecutive quarters of falling, with the third fall expected in 1Q 2014.
This fall is in sync with Forbes financial columnist Jesse Colombo who recently published a technical analysis predicting that Singapore is heading for a financial crisis like Iceland [Source]. The PAP, through the Monetary Authority of Singapore, however refuted the renowned financial analyst who rose to fame for correctly predicting the 2008 global financial meltdown, to which Jesse published a follow-up article accusing the PAP government of being in denial mode [Source].
Given that more than 25% of the mortgage loan in Singapore is based on floating interest rate [Source] – a loan scheme which guarantees interests as low as 1.8% or way below HDB concessionary loaning rate for 2 or 3 years, after which the homeowner will need to get a new loan package called “refinancing”. The question lies with what happens when these private banks started raising loan interest rates.
When mortgage interest rate is going to increase, we will start to see more people starting to sell off their house in a bid to downgrade. Housing prices will plunge further to the point where we see some homeowners servicing a mortgage loan that is below valuation price i.e. a $300K mortgage loan on a house worth only $250K. When that disparity happens, we will start to see more people defaulting on their home loans. In 2008, the HDB announced there were 33,000 homeowners or 8% defaulting on HDB loans when the resale price index was only around 139, way much more affordable than today’s resale price index of 201. As the PAP do not want to declare the number of HDB loans on default today, the default rate is definitely much higher given that prices are more expensive today. With an increasing default rate, there will be more foreclosures and direct sales made by banks.
However, owning a number of properties recovered from foreclosures is useless to banks. These are mere paper value, albeit a depreciating one, and they will be short on cash. Singapore local banks will start to see diminishing profits as the paper value of these properties see lower valuation. It will only a matter of time these diminishing profits turn into losses. And there we go: a full blown financial crisis.
Gone are the days of cheap credit. Brace yourself, the shit has only started to hit the fan.
Top 5 Singaporean grievances in 2011 survey:
1) Influx of foreigners
As the PAP government loosened immigration policies, foreigner population increased to 36% of the 5.1 million in 2011 from 20% of the 4 million population in 2001. The influx have caused congestion, overcrowding and the shortage of jobs and housing.
2) Cost of living
Inflation rate went past 5% in 2011 and the consumer price index continued to soar consistently every year despite the savings in salaries from the lack of Minimum Wage and the strengthening of currency.
3) Widening income gap
In 2010, Singapore’s GDP growth hit 14.5%. However low income earners and the poor have not benefited from the economic growth. Real salaries of the bottom 10 percentile income earners continue to stagnate at USD$1400/mth in 2011 after factoring inflation. On the other hand, the salaries of the top 10 percentile income earners soared faster than inflation rate drawing USD$23,684/mth in 2011.
4) Unaffordable HDB flats
Despite boasting a 87% home ownership rate, Singaporean young are not able to afford a public housing. This is largely due to PAP’s immigration policies which have seen a record 20,000 new citizenship and an undisclosed amount of Permanent Residency given out to foreigners each year. Most PRs and new citizens were formerly rich foreigners who came to Singapore to take advantage of the tax haven status that gives generous tax rebates and low income tax to rich individuals in Singapore. The Opposition Worker’s Party have proposed for a 20 year mortgage loan instead of the current 30 year mortgage loan period.
5) Authoritarianism of the PAP government
There is only one media company in Singapore, the SPH, and the accuracy and independence of Singapore mainstream media remains one of the most biased news agencies in the world, scoring 149th place in terms of press freedom during 2013. Just in 2013 too, popular satirist Leslie Chew made headlines when he was arrested for fabricating cartoons that embarrassed the PAP leaders. Over the past few years, there have also been letters of demand and defamation threats issued by the PAP leaders to former Opposition members and writers of socio-political sites. Democratically speaking, Singapore remains a hybrid regime with electoral rules unheard of in other democratic countries like cooling off day, Group Representation Constituencies system and having the Election Commission under the direct charge of the PAP Prime Minister who is an election candidate himself.
Fast forward 3 years later today in 2014, the above 5 concerns of Singaporeans remain valid, if not, more urgent than ever. The PAP government have instead grown more aggressive in their push for propagandas, tendency to sue, intake of foreigners (current population stands at 5.5 million) and the relentless pursuit of GDP growth through the latest billion dollar retail mall, Project Jewel. Despite having performed the worst result in GE2011, the PAP remains unfazed with PAP Minister Lim Swee Say calling his government to ignore the vocal minority and focus on the silent majority. PAP MP Baey Yam Keng have also recently claimed that his party has scored a 6 out of 10 [Source] and did not response to widespread criticisms of his party’s unpopular policies and the strewn of unprecedented breakdowns in infrastructures like the train network and shortage of hospital beds. The PR director claimed that PAP just need to work more on its relations with the people and that the PAP is largely misunderstood.
The PAP government has also been reluctant in addressing the issue of widening income gap claiming that taxing the rich will drive away businesses and foreign investments. As such, there is no Minimum Wage and the middle class who earns more than $2000 a month are denied employment protection from the Ministry of Manpower. Singaporeans continue to see wages depressed by cheap foreign labor taking up both middle and low income jobs, of which the PAP and mainstream media likes to claim that Singaporeans are picky and having unrealistic expectations. Salaries of the low income earners continue to stagnate as it has been for the past decade under Prime Minister Lee Hsien Loong.
Statistically, it is unlikely Singaporeans will be able to vote out the PAP government because of the steady stream of at least 20,000 new citizens converted into Singaporeans each year. Almost all of the new citizens are supporters of the PAP because their choice of residency is testimonial enough. New citizens do not have to serve National Service so long they are older than 18 years old, while Singaporeans have to serve NS until the age of 45. NS is largely seen as a burden to Singaporeans because of its lengthy yearly commitment in terms of in-camp trainings and mandatory physical trainings. PAP MP Lim Wee Kiak however claimed that serving NS is a privilege for Singaporeans and that foreigners do not get to enjoy such privilege. The lawyer’s twisted reasoning however do not gel well with readers of unregulated socio-political sites like The Real Singapore. But except for the occasional little storms made at the TRS Facebook, there are little reactions from the general populace who are largely ignorant and apathetic to current affairs.
Before I start my speech, I would like to say I believe protests are useless. The PAP have and will never listen to Singaporeans. The fare hike for this year will continue, and so will the fare hike for next year. We people will still pay, no matter how many people protest in this little speaker’s corner. But, that does not mean we do not resist and simply bend over. In Singapore, justice and freedom have been taken for granted. Most people here do not fight for their own rights, they are selfish and ignorant. Even though they serve National Service, they are not patriotic. They see themselves as loyal subjects of a monarchy and they do not appreciate democracy. This is the main reason why I am leaving Singapore, I am not proud to be a Singaporean either.
Ok so why the fare hike?
Firstly, we look at the nature SMRT and SBS . Like any publicly listed companies, their duty is to maximize the revenue and lower the cost so they can have a good margin to pay dividends to their shareholders. However, unlike any company in the private sector, SMRT and SBS are not competitors. They have a monopoly over the public transport. Unlike the private sector, you do not see different buses and trains running the same route and providing the same services. Transport fares are determined and endorsed by the PAP government. This is not right. When privatized, SMRT and SBS should no longer get to enjoy the benefits of nationalization. However the lame excuse by the PAP government for the fare hike is that the two companies are facing financial constraints. This is utter bullshit. Anyone can just go to their respective website and download their annual reports. You will see that the two companies have been consistently making tens of millions of net profits every single year, recession or not. Just last year alone, SMRT made $80 million in net profit while SBS made $18 million in net profit. According to the Public Transport Council, this coming fare hike will further increase SMRT’s revenue by another $17.5 million and SBS’s profit by $36 million. Truth being told, there is no financial justification for this fare hike. The two companies are anywhere but bankrupt. The fare hike do not address the disparity between profit and fare price. Of course by now you should know who the fare hike is actually serving. Shareholders. And yes we are talking about the Singapore sovereign wealth fund company Temasek Holdings Pte Ltd here. The company who borrows cheaply from our CPF money at a very low interest rate to make huge profits in the private sector…
So coming back to the fare hike.
3 years ago in 2011, the PAP claimed that nationalization of public transport will result in inefficiency and higher costs [Source]. These were the exact words Lui Tuck Yew said:
“the profit incentive of commercial enterprises is a more viable option as it promotes efficiency and productivity improvements.”
Fast forward 3 years today, what do we see? Severe inconvenience from overcrowding and increase in train breakdowns. People are walking on the tracks to get to their destination, is this Singapore or India? Besides, why should we care the breakdown is due to a power fault caused by a little girl or downsizing of track maintenance budget? Breakdowns is unacceptable when you keep raising fares. In fact, train breakdowns are becoming so common that we no longer create special committees of inquiry to investigate the cause. And then we have overcrowding, it is so fucking crowded already and yet the PAP government have the cheek to suggest a fucking 6.9 million population.
Just barely a year ago, a $1.1 billion bus improvement package was given out to SBS and SMRT. This package means more buses and better services, paid for by Singaporeans, enjoyed by both Singaporeans and Foreigners. The $1.1 billion had many Singaporeans scratching their heads: why didn’t it stop the fare hike? Of course the truth is you can never satisfy greed, but the official reason is that the two companies are in ailing financial conditions and the PAP government need to bail them out, using our money again of course. When SBS and SMRT complain they do not earn enough, the PAP government commit them with $1.1 billion, but who gives me a single cents when I complain I don’t earn enough? The PAP government claimed it is important the two companies survive, so that is why they are allowed to make a “living profit”, but when Singaporeans are unemployed and poor, who gives them a “living wage”?
The PAP government tells Singaporeans to follow a progressive wage model if they want a pay raise, but where is the similar progressive payment model for SBS and SMRT who still get paid for screwing up? This is double standards. When screw ups like these happens, the CEO should either stop drawing a salary or resign. By the way, why did SMRT choose someone who has no knowledge about train operations to be the CEO? Desmond Kwek was a paper general in the SAF so what makes him qualify as a CEO of the listed train company when there are so many train operations managers who have been working in SMRT for over ten years? Did Desmond Kuek learn how to manage a train company in the SAF? So now we have Desmond Kuek as CEO for over more than a year now, why are there still so many breakdowns? It has been proven Desmond Kuek is incompetent for the job. He should resign.
Do you know the average salary of the 27 senior management members and directors draw $300,000 a year, costing at total of $8.45 million? If we nationalized SMRT, these senior management and directors are just civil servants, do you think each of them can command $300,000 a year? Is this cost saving or corporate greed? And they have the cheek to call for a fare raise while they draw 8 millions a year?
By the way, the official figure of the fare hike may be 3.2%, but it will cost at least $15 more every month or about 10% for a monthly $150 transport budget. Singapore is already the most expensive country in the world and yet we are not anywhere near being the most well-paid. Singaporeans are already having problems with buying a house, retiring and competing for jobs with the influx of foreigners. $15 a month might seems a little to some but it could actually feed someone with heavy financial commitments for a day.
The fare hike process starts with an application by SBS and SMRT, which then go through a committee appointed by the PAP government also known as the Public Transport Council. However, each and every single time SBS or SMRT applies for a fare hike, the PTC approves. So why is the white elephant sitting in the room? If the purpose of PTC is to pretend that Singapore has a system of policy making, could I ask what happened to the “new” formula introduced by the Fare Review Mechanism Committee. In 2012, the PAP government created the Fare Review Mechanism Committee to adjust a formula so as to better reflect the ticket costs:
Fare Adjustment = Price Index – Productivity Extraction
where Price Index = 0.4 cCPI + 0.4 WI + 0.2 EI
• cCPI is the change in core Consumer Price Index.
• WI is the change in Wage Index. This refers to the
Average Monthly Earnings (Annual National Average),
adjusted to account for any changes in the employer’s
• EI is the change in Energy Index. This refers to a
composite of cost changes in electricity and diesel.
and Productivity Extraction = 0.5% (valid from 2013 to 2017)
The new formula introduced in 2012 factors in 3 components: the core Consumer Price Index, Wage Index and Energy Index. Why is this new 3.4% fare hike not following that 2012 formula? So when the formula do not work your way, you throw it out of the window? And the Public Transport Council’s chairman Gerrad Ee’s justification for the fare hike? He said that Singaporeans will “likely” enjoy a 5 percent income growth. Likely? You derived a decision based on uncertain terms? If our wages is not going to be 5 percent or perhaps go even lower than 3.4% this year, will you adjust your fare hike accordingly? No? So why start the bullshit about income growth?
Abolish the Public Transport Council immediately and stop wasting our taxes on this useless stat board. And for the 2 Transport Ministers, Lui Tuck Yew and Josephine Teo, why are they thanking the PTC profusely for the fare hike? Is it because they think they can push the blame of an unpopular fare hike to the PTC? The two of them should grow some shame and resign.
It is bad enough knowing that SBS and SMRT are only interested in making money out of the public, it is worse to know that the PAP government allows this to happen in the name of sustainability. If we want the public transport operators to be sustainable, then nationalize them. At least for us Singaporeans, we will know every single cents of their profit will be going into the National Reserves instead of shareholders. The PAP failed in its duty to protect Singaporeans’ interests when they turned a blind eye to such mindless profiteering. They changed the CEO, they have done investigations, they even tried pumping them money but the result is still the same. This is what we called incompetence and mismanagement. The problem is never resolved and it keeps recurring so often that all you do now is to give sorry excuses.
So now that the fare hike has been announced, their propaganda machinery is now in full force. We can read how positive and well-received the fare hike is on the mainstream media. They claimed they they are helping the low income, senior citizens and poly students by giving more concessions. But beware when they say they want to “help the poor”. The last time Lee Hsien Loong said he wanted to help the poor, he raised the GST to 7% and in the end the middle class and poor become worse off. This fare hike will similarly going to hit the very people they claimed to help. This fare hike is going to increase the cost of living and worsen our already dropping standard of living.
Sincerely from the bottom of my heart: Fuck your fare hike
In Singapore, inequality is celebrated by the majority. The PAP government and many Singaporeans agree that resources and opportunities should only be given to qualified candidates with other irrelevant attributes like having brought up in a well-to-do family and coming from one of the many little bigoted elitist schools in Singapore. This very mindset is elitism and it propagates inequality and create a class of lazy and entitled individuals who see themselves a level higher than others. However if you are going to ask these bigots, they will tell you this is Meritocracy and it promotes equality and incentivize others (especially directed at the poor and middle class) to work harder.
Don’t get me wrong, I am all for rewarding hard work. But the reality shows that no matter how many hours of hard work the poor and middle class put in, they will forever be stuck. These people faces an income ceiling, not because they do not have a bachelor degree with honors like the elites, but because they were not born an elite. For a Singaporean who did not go through the Junior College route and secure a scholarship, you are pretty much considered the 90% of the non-elites. This is prevalent in the PAP leadership selection process. Among its 80 Members of Parliament, only 1 took the polytechnic diploma route instead of the JC route (Joo Chiat MP Charles Chong). Similarly, a blanket profiling shows that nearly all of the PAP MPs come through elite schools like Raffles Institution, Raffles Girls School and Anglo-Chinese School. It is of course no surprised when PAP candidates like Dr Koh Poh Koon make out-of-touch remarks like this [Source].
The political rift Singapore is deeply divided in is an indirect cause of elitism and it is pretty obvious Singaporeans are disunited despite the PAP pretending otherwise. On the other side, we have a group of non-elites, or the majority, real Singaporeans. Talented non-elites are like K-Pop finalist Stephanie Koh, who has to start earning her own living after graduating from a diploma is a very good example (at the age of 19, most teenage elites have not stepped into the working world yet). In her viral Youtube video [Source], she tells the world why she is not proud to be a Singaporean. While a young Singaporean elite would wax lyrical how ideal Singapore is, most non-elite Singaporeans who bear the brunt of cost of living with no government support are ready to tell the truth about Singapore.
A recent survey shows that more than 50% of Singaporeans will emigrate if they have the opportunity to [Source]. People who look forward to emigration are typically those disillusioned with their quality of living and having little faith in Singapore’s economical and social future. To the PAP government, this is exceptionally dangerous because, birth rate is already the lowest in the world and coupling that with the outflow of Singaporeans, there will not be anyone left around to serve National Service.
The unseen and subtle response of the PAP government is of course to cut the means and options of Singaporeans emigrating. In Singapore, most Singaporeans are not degree-equipped because the PAP refuse to increase the number of local university places. The recent increase in universities is also a pretence because schools like the SUTD have more foreigners including Permanent Residents than Singaporeans studying in them. If you can’t get a degree, most likely you will not be able to qualify as a skilled migrant in developed countries like Australia and New Zealand. As Australia become Singaporeans’ preferred home, working holidays schemes in Australia for Singaporeans have been cancelled since 2012. The only working holiday scheme available for Singaporeans is only New Zealand and that pales to the variety of options Taiwanese and Malaysian citizens have to places like Canada, US and Australia.
*Cheated Singaporean is a non-elite and non-talent engineer who started earning his own pocket money when he was 14.
Degree: academic transcript will be out by March
Driving license: Mastered everything about driving after 13 lessons. Booked test on 13th April
Current work: Frustrating (Long hours, low pay relative to other project managers and a shouting session with an uncooperative technician…I will skip this shit)
Have just picked up a tuition assignment in Somerset. I need to ramp up on my income and keep my costs down if I want to leave sg asap. I may be going for banquet waitering over the weekend.
Since my last post, I have also looked up an agent and he presented me a cost list:
- SGD 1,500 – when we start (at this stage you also pay SGD 200 to cover some lawyers costs, courier costs etc)
- SGD 1,500 – when the skills assessment is complete.
- SGD 1,000 – when the visa application is submitted.
- AUD 670 – skills assessment application fee
- AUD 200-250 – state sponsorship application fee (varies depending on the state).
- Visa application fee – AUD 3520 plus AUD 1760 to include your wife.
My wife and I have been contemplating about the trip to Aussie because it seems like I have a lead time issue – well we want to get out of sg asap and latest by June. And if we were to wait for subclass 189/190, its gonna take quite a while. We looked up other options and I discovered a really attractive one:
One can simply fly there as a tourist and begin applying for an Open Work Permit which allows you to work for any employer. This is really awesome news for the both of us, especially when the Aussie option is so fucking expensive (entire process is easily 8k AUD). The cost alone is daunting and deterring enough for us. Nonetheless, we will be going to Aussie for a short holiday (5 days?) in April after I get my driving license and then we shall decide if we should go for Canada instead. And my little research tells me to go Vancouver, but I’m actually prepared for anywhere.
Her cousin at Brooklyn New York called her up, offered her place for accommodation and asked us to go over. But I have been reading a lot of US news about murders and rapes…and it seems US isn’t really such a good option.