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10-08-2014, 09:30 AM
An honorable member of the Coffee Shop Has Just Posted the Following:
Did it ever occur to TOC that:
- it is the retirees themselves that are dying to do so?
- it is voluntary?
- home-ownership of 90% is not the norm in this world?
- CPF money is retirement money meant to be spent - within one's lifetime?
- even the smallest element of bequest is nonsense?
- the number of singles/widowed with no real beneficiaries has been increasing?
Many retirees earned/saved very little but also bought their HDB flats for very little when Singapore was a low-cost country. Even so, a big chunk of money is stuck in HDB flats due to the Minimum Sum and pledge of property.*
Now that Singapore is a high-cost country which also mean the values of HDB flats have soared. It makes economic sense to unlock the value of HDB flats for many retirees. It is also obviously necessary for many poor retirees. What "familiarity, intimate place, memories" is TOC talking about when some retirees are dying to move to retirement villages or studio apartments as a refreshing change. Some of the younger generation are dying to buy over the well-located properties too.
Why has the cost structure of Singapore changed? It is due to the increase in foreign inputs (labour, capital). That's where the trade-off comes in. Employment/income goes up but so does general price level, including prices of HDB flats of course.
Two wrongs don't make one right. We cannot reduce the population back to 4 million and sink Singapore. Costs of living may come down but so will property prices. The younger generation will be in negative equity. Neither should we continue to increase the population to sustain the growth in property prices as it will lead to a bubble.
The inter-generational wealth transfer is exaggerated. The younger generation may pay more than the previous generation for properties but their incomes are also higher. (The big problem is depressed wages at the bottom rung which is another issue.) They need not monetise their flats when their time come.
Monetisation of flats offers many advantages. Think of supply of housing as total gross floor area of the entire country instead of total number of units. By allowing the retirees to release the bigger flats at choice locations to the younger generation, we need not build more gross floor area than is necessary, which also mean we can rely less on foreign construction workers. Slowing the supply is commonsense in a volatile economic situation. The younger generation can avoid potentially bigger negative equity. Some of them may be bankrupted if they lose their jobs.
Let the record speaks for itself:
- Asia Financial Crisis (1998)
- Internet Bubble (2000)
- 911 (2001)
- SARS (2002)
- Iraq War (2003)
- Global Financial Crisis (2007-2008)
- Eurozone Crisis (2009- )
- ??? Crisis (201?- )
(* It is obvious that we should lobby for lower CPF returns and the return of a portion of our CPF money. Those people who ask for higher risks/returns and deferring of withdrawal age to 65 should be honest enough to commit hara kiri, especially when a deep and long crisis strikes.)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?187592-TOC-asks-quot-why-should-retirees-sell-or-unlock-the-value-in-their-flats-quot&goto=newpost).
Did it ever occur to TOC that:
- it is the retirees themselves that are dying to do so?
- it is voluntary?
- home-ownership of 90% is not the norm in this world?
- CPF money is retirement money meant to be spent - within one's lifetime?
- even the smallest element of bequest is nonsense?
- the number of singles/widowed with no real beneficiaries has been increasing?
Many retirees earned/saved very little but also bought their HDB flats for very little when Singapore was a low-cost country. Even so, a big chunk of money is stuck in HDB flats due to the Minimum Sum and pledge of property.*
Now that Singapore is a high-cost country which also mean the values of HDB flats have soared. It makes economic sense to unlock the value of HDB flats for many retirees. It is also obviously necessary for many poor retirees. What "familiarity, intimate place, memories" is TOC talking about when some retirees are dying to move to retirement villages or studio apartments as a refreshing change. Some of the younger generation are dying to buy over the well-located properties too.
Why has the cost structure of Singapore changed? It is due to the increase in foreign inputs (labour, capital). That's where the trade-off comes in. Employment/income goes up but so does general price level, including prices of HDB flats of course.
Two wrongs don't make one right. We cannot reduce the population back to 4 million and sink Singapore. Costs of living may come down but so will property prices. The younger generation will be in negative equity. Neither should we continue to increase the population to sustain the growth in property prices as it will lead to a bubble.
The inter-generational wealth transfer is exaggerated. The younger generation may pay more than the previous generation for properties but their incomes are also higher. (The big problem is depressed wages at the bottom rung which is another issue.) They need not monetise their flats when their time come.
Monetisation of flats offers many advantages. Think of supply of housing as total gross floor area of the entire country instead of total number of units. By allowing the retirees to release the bigger flats at choice locations to the younger generation, we need not build more gross floor area than is necessary, which also mean we can rely less on foreign construction workers. Slowing the supply is commonsense in a volatile economic situation. The younger generation can avoid potentially bigger negative equity. Some of them may be bankrupted if they lose their jobs.
Let the record speaks for itself:
- Asia Financial Crisis (1998)
- Internet Bubble (2000)
- 911 (2001)
- SARS (2002)
- Iraq War (2003)
- Global Financial Crisis (2007-2008)
- Eurozone Crisis (2009- )
- ??? Crisis (201?- )
(* It is obvious that we should lobby for lower CPF returns and the return of a portion of our CPF money. Those people who ask for higher risks/returns and deferring of withdrawal age to 65 should be honest enough to commit hara kiri, especially when a deep and long crisis strikes.)
Click here to view the whole thread at www.sammyboy.com (http://www.sammyboy.com/showthread.php?187592-TOC-asks-quot-why-should-retirees-sell-or-unlock-the-value-in-their-flats-quot&goto=newpost).