Monday, March 08, 2010

Our dear MBT does not understand the idea behind market forces?

Get a load of this article:

Grants, smaller flats instead of shorter lease tenure (By Ong Dai Lin, TODAY | Posted: 09 March 2010 0751 hr) 

Ignore my pet peeve that HDB flats are not really owned by the buyers.

Ignore my other peeve that the Singapore government has dominant control of the market (if one can call it a market) share for housing in Singapore.

Ignore the fact that a 99-year lease is as likely (if not more) to screw the 2nd generation choosing to stay in their flats as a 60-year lease in screwing the 1st generation.

Ignore the fact that the government will have to come up with a way of dealing with end-of-lease issues soon, whether they are 99-year leases or 60-year leases. Perhaps lease renewal? Perhaps the provision of alternative housing locations at a discount? Or perhaps they expect to simply take the homes away from those Singaporeans and say "tough luck"?

It would appear Mah Bow Tan does not appear to understand the idea behind market forces!!! What outstanding words to be spoken in parliament:

Mr Mah was also asked by MP Cedric Foo if Singaporeans are not buying the flats situated in poorer locations because they are not "priced correctly".

Mr Mah responded: "We do price these less attractive flats cheaper than the other flats. Is it cheap enough? I don't know how cheap is cheap enough."

"But I think the evidence says that people who reject these flats, some of them don't even look at the price when they do reject them. So, it's not just a matter of pricing."

Cheap is "cheap enough" when you start getting your target take-up rates or do your HDB MBAs not tell you these things? Afterall, you were the one who said that the material cost does not reflect the "value" of the flat so I do not think you should fret when you build flats that cost more than the perceived value? Using examples of people not wanting a flat regardless of price is disingenuous. There are lots of reasons why *some* people would not want to live in particular places, crappy or not. If the general data is showing a low take-up rate in a general area, well then you better start thinking about making the area more attractive, whether it involves pricing or not.


Luke said...

Says a lot about what really is happening on the ground when ministers have to rely on anedoctal evidence to debunk "myths"?

Chee Wai Lee said...

I think (hope) it is just laziness (incompetence) on the part of MBT. It would have been helpful if he had pointed us to the statistical survey that provided the evidential basis for his conclusions, so we can better understand his interpretation of the data.

The worst-case scenario is that he's pulling wool over our eyes, casting anecdotal evidence as real and presenting public policy as if they were based on that evidence while the real reasons are somewhere else.