Singapore's property bubble; cause for alarm. HDB property owners beware

Ladies and Gentlemen,

It is an understatement to say property prices in the tiny island of Singapore is expensive. Very expensive. But it wasn't so a even a decade ago.

With the veneer of a vibrant successful city state, carefully orchestrated by the Joseph Goebbels of Singapore's state owned news agencies (mind you every single news media is state owned, the island propaganda machinery), we all thought and so did everyone else that it was nothing but boom town.

As a result the scarce land resources and a bursting at the seams population increase, brought about by instantly importing 3 million foreigners into the overcrowded tiny island, not to mention, all the good news being purveyed both within and without the island naturally made land prices shoot up not ten fold but 100 fold.

But if I  knew the fundamental flaws of the regime, I would be very worried to say the least. I would in fact, had I been sitting on a property which has appreciated 100 fold, think the best think to do now is to sell and clear out as fast as I can.

This is why.

It is not very certain, in fact it is most unlikely that the island and it's economy would outlast the 90 year old dying Singaporean Superman, the All mighty and Omnipotent, Lee Kuan Yew for whom the sun rises, the birds sings and swallow appears in Spring (Sorry I forgot there is no Spring in Singapore, it is a tropical cauldron).

Unlike Australia, Hong Kong and every other vibrant democracy, there is no established manner for change of government. Today it is Lee Kuan Yew who rules, albeit through his son, but when he dies, the question is, does his son rule and if so why? After all his son was appointed Prime Minister by his father although the Constitution makes no provision for dynastic change. Don't forget we are not the Ming Dynasty.

And if son decides not to rule, what happens next? Does he simply appoint someone of his choosing and are we all simply to submit to whoever that person happens to be?

All this really does not make much sense. In fact let me put it straight.

When 90 year old gravely ill Lee Kuan Yew dies, which is going to happen soon, you are going to have chaos, simply because no one knows what is going to replace him. There is no established protocol in place unlike democracies of the world with respected judiciaries and the rule of law.

On the one hand we have a Constitution. But that constitution is simply ignored.

Instead of an independent judiciary, we have one which is corrupt and beholden to the dictatorship.

The people have lost all respect for their judiciary which is seen routinely charging bloggers for "scandalizing" them, a queer way of putting it,  and contempt of court for any criticism however innocuous.

You have a police force which no one respects either.

Most of them are dummies with no more than 6th grade education who will go around arresting anyone whom they are ordered to. They are simply dummies or thugs. The people have no respect for them either. Unlike in the US where you need a college degree.

And then you have parliamentary elections which are routinely rigged. Qualified opposition candidates no longer dare to stand for elections because they fear defamation actions before Kangaroo court judges and instant impoverishment and bankruptcy.

And then you have the daily floods which are getting deeper and deeper day by day with climate change, warmer atmospheric temperature and heavier rainfall.

And as we speak, principally because of the Internet, and the fact Asians given a chance would want to further their education, you are creating more and more thinking individuals who for the first time realize that all that glitter is not necessarily gold and Singapore is really in a precarious position on the ledge and liable to collapse and break into smithereens like Humpty Dumpty. So they emigrate to Australia in droves and there is this unstoppable and mounting brain drain.

Remember when 90 year old Lee Kuan Yew dies which is going to happen pretty soon, and the certain uncertainty that will inevitably follow, a small island with a tiny population like Singapore completely reliant on foreign businesses, is unlikely to remain intact.

At the first sign of uncertainty, there will be investment outflow, and after that there will be panic.

And it does not take much to empty out an island with only 2 million locals and the remaining 3 million foreigners and foreign businesses. It is simply going to collapse.

My warning to property owners, and I mean this with all earnest, investors and anyone doing business or has interests in Singapore, think about what I have said.

For the vast majority of Singaporeans, in fact 99%, who all live in government built Housing and Development Board flats, their property value is usually their only asset. And what a pity if you lose it all.

And there is a good possibility that with Lee Kuan Yew's demise which, by the law of nature is going to happen very soon (he is 90 and gravely ill), there will be severe instability and a very good likelihood that HDB flats prices will come tumbling.

I fear this will happen. And this means of course that if you thought your flat could be sold for $400,000.00 it will probably go for just $40,000.

Perhaps it makes sense to be prudent and get out while you can. You will thank me for it.

Gopalan Nair
Attorney at Law
A Singaporean in exile
Fremont, California USA
Tel: 510 491 8525
Email: nair.gopalan@yahoo.com