Friday, June 29, 2007

Landed property... A privilege for all S'poreans or just the farkin rich ones?

Since 1973, the Residential Property Act has restricted foreigners and permanent residents from owning private residential property without prior official approval.

“The restrictions on foreign ownership of landed property is unlikely to be eased because it is an emotional issue. It involves (putting) a tangible, physical part of Singapore in foreign hands.”

“Prior to the Residential Property Act, rich Indonesians snapped up properties, pricing Singaporeans out of the market."

“Landed properties should not be priced out of Singaporean’s reach (or) it could lead to disgruntled Singaporeans.”

Keeping certain privileges of home ownership for citizens only “encourages foreigners to commit to Singapore, to sink their roots here”.

“Some things have to be preserved for Singaporeans. Landed property ownership is one of them. It is the privilege of being Singaporean.”

Bollocks! Why do I say that?

Look at the average price of a landed bungalow. It's S$17 fucking million Sing dollars. That's 11 million US$. And do you know how many people in Singapore have US$11 million of assets?

Well... I don't know either, but it's definitely fewer than 67,000. That's because only 2% or 67,000 of Singapore's entire resident population (ref here) have US$1 million or more in assets (11 times less than the US$11 million / S$17 million needed for an average bungalow). But for simplicity's sake, let's assume that you need at least US$1 million to buy a landed property (say... a small terrace house).

Since the 67,000 also includes PRs, that means that a portion of that 67,000 millionaires are not citizens, and therefore not entitled to own landed property. This means that Singaporean citizens who can afford and qualify to buy landed property number significantly fewer than 67,000.

So, how many 'disgruntled' Singaporeans are we talking about? Just how many Singaporean citizens qualify into that exclusive group of 67,000 millionaires PLUS who are also citizens - and therefore whose landed property ownership privileges need to be protected?

Doesn't this mean that a very small and very rich percentage of Singapore's citizens are accruing landed property ownership privileges to themselves, but by invoking privileges in the name of ALL Singaporean citizens... 98% of whom cannot possibly afford to enjoy it? (ie. it's 98% if we assume the split of millionaires & non-millionaires are the same for citizens and PRs).

Hmmm... this feels to me to be very, very similar to the Malaysian bumiputra special privileges NEP argument, where a very small fraction of rich, politically-connected Malay UMNOputras enjoy the lion's share of the NEP's freebies, on behalf of their poor kampung cousins - in whose name, were those freebies wrested from non-bumi Malaysians in the first place.

The only difference is, poorer Singaporeans are not eternally precluded by the accident of birth, from becoming rich. There's still good ol' blood, sweat and tears. But the essence is the same. Like I said in a previous blog, is this what's called the rich getting richer, and the poor get kicked while they're down?

And if you ask me how Singapore can open up the property market to non-citizens and still keep it affordable to all? Simple, limit each person to only one piece of residential property (landed or non-landed). That will kill speculation, hoarding, profiteering and guarantee value for money, all in one fell swoop.

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