Home > Problems caused by PAP's policy > BT reported 76% margin for some DBSS while Khaw Boon Wan said it’s ‘only’ 26%

BT reported 76% margin for some DBSS while Khaw Boon Wan said it’s ‘only’ 26%

Obviously Business Times stirred up a pot of shit with this outrageous figure of 76% margin. While the new Minister of National Development is quick to correct this figure in his blog (surprisingly the controller of local media is being taken for a ride by it’s own minions), the minister cited the mistake is due to a large difference between the land cost:

“For example, it quoted a land price of $82,222,000 and a maximum GFA of 721,188 square feet for the project.  Both figures were wrong. The correct figures were respectively $178,128,000 and 682,385 square feet.  This was a huge difference of almost $100 million.  The errors led to a gross over-estimation by BT of the developer’s profit and gross profit margin.”

No matter what, the fact remains that a ‘subsidized’ public housing will be sold for close to 30% profit. And that is ridiculous. What is even more outrageous is the Sim Lian can afford to dramatically lower their price range by a difference of $100,000. It does not take a PhD to realize that the DBSS is a failed policy. If the government wants to provide public housing, it should go back to the roots of offering affordable (but then the term affordable is a relative term in this society with burgeoning Gini coefficient) housing for everyone. No point offering something in between the gray lines and charge a price most people cannot associate with the term ‘public housing’. Didn’t the government knows something as simple as product differentiation? If the government wants to provide a ‘middle class’ housing that lies between a public housing and a condominium, it should be relegated to the private sector.

Why did Sim Lian group gave a ‘misleading’ ‘indicative price range’ if they expect to sell at a lower cost, as it was asserted in the local newspaper? What use is this ‘indicative price range? Nothing except to gauge how much profit surplus the developer can squeeze from the buyers. Private developers are greedy profit driven monsters. We don’t expect them to be benevolent in selling below the maximum price they can charge. The DBSS scheme had created another money tree for private developers subsidized by citizens taxes and take advantage of extreme low elastic demand caused by the era of Mah Bow Tan.

That is absolutely absolutely absolutely unforgivable. MND and the government has helped the private developers to leech on citizens.

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