A Singaporean Economic Refugee
Tale A Singaporean Economic Refugee
Yesterday, I managed to contact an old friend. He still keeps his old mobile phone number.
A couple of years back, he was a salesman, a real estate agent. Not the top, nonetheless a decent salesman. He did get a couple of awards here and there, some trophies like best sales, etc.
At that point of time, the property prices in Singapore was booming. Especially with the Housing and Development Board (HDB) flats.
People are willing to pay extra monies on top of the market valuation.
A $30,000 above the valuation was a normal thing. As with any booming market, agents can make a good living.
The commission rate was typically 2% for selling and 1% for buying.
In Singapore, it was and still is, peculiar to get the same agent to do both the selling as well as buying houses for their clients.
So the agent could have sold the house for $400,000 and get 2% and from the family and look for another house for that same family and get a commission for it too.
All in all, she would get 3% for buying and selling from the same family. So if the total selling and buying is $700,000, she would get $21,000.
All she needed to do was to get 1 buy and sell a month, and she would be on easy street.
Things doesn’t always stay the same. The Housing and Development Board or HDB (so-called government agency that provided “subsidized” flat to Singaporeans) introduced a slew of measures to curb the runaway prices of government “subsidized” flat. Besides that there were the “loan” fixing and other underhand tactics too numerous to list here.
To cut the long story short, what used to take only 1 working adult 10 to 15 years to pay off the mortgage of a “subsidized” HDB flat; now takes 2 working adults 30 years to pay it off.
And by the time the couple hits “retirement”; their Central Provident Fund (CPF) savings are practically zero, though as a consolation their flat is fully paid.
And these retirees needed to work after retirement for their daily bread. It’s not a pretty picture. Old man and woman, struggling to go to work with a very minimum pay (not minimum wage).
How it affected my friend
Because of the changes and other factors, the HDB property market dried up.
During that time, when property prices were high, he bought a 4 room flat at an astronomical price of about $400,000.
A lot of people at that time, believed that their property will always go up. Coupled with a strong economy, people’s spending are more exuberant.
His sales plummeted. For the past two years, he could not keep up with the mortgage. The arrears snowballed until it became the equivalent of more than a year’s mortgage.
One fine day, HDB decided to repossess his flat or “compulsory acquisition” of his “subsidized” flat.
He did try to get a job. Unfortunately, he is a minority in Singapore.
When the economy picks up, the minority is the last to be hired; when the economy is down, the minority is the first to be fired.
The companies are only offering the very minimum pay and not minimum wage. He couldn’t make ends meet.
About six months ago, the HDB forcefully acquired his flat. His family of 5 kids, 1 wife got kicked out by the provider of “subsidized” flat.
Some stupid hack would think: “What happened to the good income he earned when he was an agent?”
As I said, only a stupid hack would ask that question.
Where is the family staying now
Here’s the kicker:
He now rents an apartment in the neighboring country, Malaysia. Stays somewhere in Johor Bahru, Larkin.
His monthly rent? Monthly about RM600. I told him he could get cheaper if he rents a terrace house; the going rate is about RM300 to RM400.
True, he told me. He doesn’t own a car and Larkin is a bus interchange to Singapore.
Every morning, his SINGAPOREAN kids take service 170 from Johor Bahru to Singapore to attend school.
And for himself? He told me he now works part-time as a driver.
When someone tells you that they work part-time, you would probably think it’s either 8:00am to maybe 12:00pm or 12:00pm to 5:00pm.
That’s where you’re wrong. His part-time is from 10:00am to 9:00pm. I don’t know about you, that sounds like a full-time job to me.
Why didn’t he just stay in Singapore
After the forced selling of his house, he didn’t have enough money for the down payment of another “subsidized” flat. His apartment was forced-sold at a loss.
Furthermore, he isn’t entitled to another HDB concessionary loan. He has to get the housing loan from a bank (one of the many changes that HDB instituted).
Banks would only loan money to rich people. His situation would be defined as a significant credit risk. Furthermore with him being in the middle age (50), nobody is willing to loan him money to be paid for the next 30 years.
What about renting?
The HDB have a curious rule that states you can’t rent any flat from them for 30 months after you have sold your flat.
For renting direct from HDB, the going rate is less than $100 a month.
On the so-called open market or not directly from HDB (the owner of the flat rents), the going rate for a room is about $400 to $600; a HDB apartment from upwards of $1,500 and above depending on the size of the flat.
If the flat is close to a bus interchange or an MRT station, be ready to pay a premium for it.
Relatives? You got to be joking. HDB flat is already way too small for a family, let alone for 2 families.
He’s not the only one
I’m sure there are other Singaporean economic refugees. I know of at least 2 more. They can’t afford the daily living expenses here, rents a place in Johor Bahru and daily commutes to Singapore for work.
He’s now a SERS. No, not the Selective En Bloc Redevelopment Scheme done by HDB. A Singaporean Economic RefugeeS. Come to think of it he has indeed been “selectively redeveloped” to Malaysia.
Native Singaporeans being like permanent residents in their own native county, Singapore.