Asset enhancement fueled by a mountain of debt is a scam, high HDB flat prices to stay

Singaporeans have been tricked by PAP politicians into believing they own something when in reality they don’t.

Most are still living in fantasyland or denial of the biggest asset enhancement (AE) scam – the biggest Ponzi scheme in the world.

For Lau Goh’s AE to work, it needs bigger suckers to purchase HDB flats at higher prices. Unfortunately, the bigger suckers are our children and future generations of citizens.

For something such as a HDB flat to be considered an asset, it has to be debt-free. Otherwise, it remains a huge liability until all mortgage installments have been paid.

But the fact is Singaporeans’ household debt, ie liability, has also been increasing to support Lau Goh’s AE.

In 1995, household debt as a percentage of GDP was about 30%. Within a short span of 20 years, this doubled to 60%. tradingeconomics.com

At 30% of our US$87 billion GDP in 1995, debt stood at US$26 billion. At 60% of a 2015 GDP of US$292 billion, household debt had ballooned to US$175 billion.

The biggest household debt component is housing loan, estimated to be about 74% of household debt.

Is Lau Goh’s AE built on a mountain of debt sustainable? The answer is obvious

The only way for PAP to prop up ‘asset’ prices is to create additional demand by growing the foreigner population. Even a reduction of, say, 50% of PAP’s planned increase in the foreigner population till 2030 will have disastrous consequences for HDB lessees.

The wealth of PAP elites and their cronies is inextricably tied to real estate. In 2014, Property Guru reported that “half of the 50 richest persons in the republic are property tycoons“. This is the reason why Mah Bow Tan, Khaw Boon Wan and Lawrence Wong will never implement policies to make public housing affordable.

For HDB flats to become more affordable, prices must fall. Instead, PAP has continued to throw more tax dollars in the form of CPF housing grants to support HDB flat prices. For example, the PAP has recently increased CPF housing grants and “eligible first-timer families buying resale flats can now enjoy up to $110,000 in housing grants“.

HDB flat prices will not fall to affordable levels because it will drag down private property prices as well as affect government revenue, eg, lower stamp duties, GST, property tax, etc. Private property prices are supported by HDB flat prices

If resale flat prices fall, HDB will be forced to sell new flats at lower prices because they are pegged at 20 to 30% below resale flat prices. During the last 4 years, HDB constructed more than 100,000 new flats and had a lot to lose if resale prices had fallen.

Whenever PAP increases grants to ‘help’ Singaporeans, there’s always a hidden agenda. High HDB flat prices are here to stay for good and look set to go even higher.

As should be evident to an idiot by now, HDB asset enhancement has all along been a scam.

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2 Responses to Asset enhancement fueled by a mountain of debt is a scam, high HDB flat prices to stay

  1. Sinkie says:

    I think we’ve reached a point in Sinkie-land where many Sinkies have realized they’ve been conned, but are helpless as they’ve sunk in too much costs, monies, effort to blow-up or reset the system. What many are planning is to find a bigger fool to unload their timebombs onto. Those fools will be mostly other fellow Sinkies, but now it’s a dog-eat-dog environment. Survival of the fittest & ruthless. If there is an investigative expose of top PAPies assets & net worth, I’ll bet Sinkies will be shocked at how high a percentage of their assets are located overseas. Most top PAPies are fully prepared to fly out of SG with their entire families within 30 minutes. Their properties & assets in SG probably at most 20%-30% of their total net worth — still ok to lose in event of emergency.

  2. sgplblog says:

    Quite a lot of snark, little in hard evidence that most goverment spending is going towards propping up house prices, There was a little something known as a global finacial crisi ongoing which required deficit spending to allivate the symptoms.

    Also borrowing money is alright cause our interst rates are so low that we can make all of it back plus interste via simple investing. And yes housing prices in singapore will increase in the long-term, anybody cabable of basic thought could have predicted that

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