Saturday, March 31, 2012

Burning money

Bishan Town is in the news again. No, it's not just about its newest landscaping, though that is noteworthy. But more than anything else, Bishan is known for its expensive public housing. Many years ago, in the 1990s, during the height of the housing bubble, someone paid a million dollars for a public housing apartment there-an astonishing sum in those days! Today, one of its new private condominium, the Sky Habitat @ Bishan, is reportedly asking for S$1,700-S$1,800 psf  for its apartments. For a 1,200 square foot apartment (about the size of a 5-room public housing  apartment), the price will come up to S$2.04m - an insane price. For comparison, a 5-roomer public housing apartment could be got for $500k plus or minus $100k As our politicians have explained, that is not including the generous subsidies that they routinely dole out for 'needy' people. One wonders if it is the property developer who is insane, or the prospective buyer is, or both of them are, based on the willing-buyer/willing seller principle? What's so insane, you ask?

Well, first, it isn't a landed property. If it were, in land-scarce Singapore, that will make sense in the long run. Second it doesn't sit on free-hold land. Its only a 99-year leasehold property. Third, it isn't in a prime district like Bukit Timah. It is located in a suburdan part of Singapore, somewhere in the middle of the island and is surrounded by plenty of public housing apartments. It doesn't boast of fantastic scenery (yeah, don't believe the advertisements which invariably paint a scenic picture of the locality). In fact, within living memory, this place used to be a cemetery,  not that I have anything against that. I used to, as a boy, visit some relatives who lived in the kampongs in Bishan (Peck San Theng, I remember my father calling the place where the relative stayed) then during the Lunar New Year. And I do remember the small bridge made of wooden planks over the stream that I had to go over to get to my relative's house.

Over the years, it has developed into a much sought after place to live in, but it isn't exclusive in any way. There are those who say it is served by the MRT station. That's true of and increasingly true of every town in Singapore. I know of other places where it is even more well-served by the MRT. Others say that the island's premier Raffles Institution (RI) being nearby is a big plus. Yeah, it probably is, but how many years do you expect your child to stay in RI for this to be remain a 'plus'? Of course, there is more than an even hope that others may be looking to move in, so you may have a sale-able apartment location. But at this price, I wonder what margins you will gain, anyway? Yet others point to the brand name designer behind the condo. Well, I don't know who he is, I am not in this line, but the visual are quite attractive, which is true of other developments elsewhere on the island.

So really, I see no reason beyond insanity to buy this place at this kind of prices. The only reason one would do so is if you have money to burn, and these are not those that you bring to the cemetery.

No comments :